Ep 56| The Future Of Workspaces And Culture w Paul Holland #MUIYB

So, Paul, it's good to see you. And one of the things you said, which was— I was like, I got to get Paul on here— is one of, if not the leading indicator for perhaps the economy and all that's going on is furniture sales.

Yeah.

What's the correlation?

Yeah. You know, office furniture, right? It's all about people. It's all about jobs. And jobs is such a huge piece of the economy, right? So, That's why I say that is, so goes, especially in this period, right? We're trying to figure out how are we going to work? We work at home, we're going to go back to an office. What are we doing? So, yeah, it's a leading indicator, certainly in our industry. It's a leading indicator. So, sure.

Okay. So then how, how does it function as a leading indicator? How do we know where people are going based upon furniture sales?

You know, it's interesting. We can tell it really relates to job creation, as you can imagine. You know, back in February 2020, we were 3.5% unemployment, right? Our industry, which equips commercial environments enabling people to work, was at a historic high, which is an amazing thing. So is it a leading indicator? We think it is, but it's also closely connected, right? You— this industry, you can't decouple it from the economy like so many industries. But I do think what's fascinating about our industry, and when we see people evolving and changing the way they're working, whether that's being driven by technology or whatever, it really kind of gives us, I think, a great kind of signal set for the rest of, of the economy. What's the healthy economy doing? What's going on? Are people consuming? Are they producing? What's happening there, you know? So it's a fascinating industry to be involved in.

Yeah, I can imagine. And, um, well, at least in 2020 and now 2021, it seems like most people are working from home. Um, does that mean that corporations, businesses are buying new furniture for homes? Are they— because I also presume, and these are assumptions, if I buy furniture, I'm anticipating the use of that furniture for 5 or 10 years out.

Yeah. So I would say that what's really going on, what's driving behind this, and you can appreciate this, you're a serial entrepreneur, so you understand this, right? It's where are things headed and am I set in terms of my product, my service offering, my messaging to go there? And so we I think it's been fascinating. You know, remote work was an experiment prior to the pandemic, so we didn't really give much thought about if people aren't working in an office environment, how do we equip them? Well, the reality is today remote work's no longer an experiment, it's a reality. So the bigger question now becomes, okay, people, we're probably going to be seeing an entire global workforce thinking about hybrid work, flexibility of work. We'll always work, right? People will always work. So then the variables become where do they work and how do they work? So today in our industry, it's really about understanding and even advising people about how to get into the office environment, but to also recognize with a new kind of a new level of recognizing that we're going to work from all kinds of places, home included, right? So what does that look like? That even has implications out into the residential residential market as people think about what kind of home do I need to have an office space, those sorts of things. So it's been fascinating to watch it evolve in a very compressed timeframe.

So why don't we share with the listeners a little context? Tell me, tell me about Solomon Coyle and why this is all clickable.

Yeah, thank you. Solomon Coyle, we— I think first and foremost, we're a research company. We research, we do financial benchmark, we study small business and large business in the contract furniture or built environment industry. So we work with dealers that could be below $5 million in annual revenue up to half a billion. And the manufacturers in that space as well, that could be global multi-billion dollar entities or, you know, $60 million almost craftsman-like products. So we literally study what is a good business in that environment, compensation research, all of that. And that really informs all the work we do with both distribution channels and the manufacturing. And it all has to do with how and where and when people work, right?

Yeah. Okay. So that's fascinating. So, uh, you use this term in— at least I'm paraphrasing here— like a hybrid work environment where— so, so before COVID uh, you're calling it the great experiment or something to that effect where people are working remotely, but it really wasn't ex— I don't know if the word's expected, but now it's the new standard. So, now that theoretically COVID's being addressed through vaccines, where do we land? Where does the business environment land after this?

Yeah, that's a great question. I think that, you know, everybody's on new ground. Everybody, you and I, every industry, every, and people are on new ground. So, you know, we went home because we had to protect ourselves and people. They went to work. We have found that, yeah, we can function. Is it as good For better? No, it's really just a part of a new ecosystem of working, as opposed to thinking that, you know, the only place we can work is in an office. And if I have to do heads-down work, put me in a bubble somewhere. Well, maybe in the future, the heads-down work is done in a home work environment when we need collaboration. And we need collaboration for innovation, for mental health, you name it, right? We gotta— we have to come together. And so I think we're, we're going to be smarter. About what type of workspace is needed for what type of work, right? Very important.

Yeah, I agree. And what?

Well, and I think the other big consideration is we went through the Industrial Revolution, Technical Revolution, shareholder capitalism. Now it's gonna be about people. It's gonna be about people, them being effective, them being safe, a sense of wellbeing, health. I mean, it's gonna be an interesting shift in focus. To get—

oh yeah, yeah, I agree. You know, I think, Paul, of, um, the, the work environment, um, prior where collaboration was— seemed more impromptu. I get it wasn't actually planned, but if we know working at home, or we believe that working at home is more for the heads down, the office is more for the collaborative, do we have to be very deliberate about scheduling that? And, and does that compromise that impromptu element?

I think that's an interesting thing. You know, if we, Mike, that's really a critical consideration in this whole thing, right? Because if we only say, well, let's just work from home, then we're so siloed. And you know, as a businessman, that siloed business is ineffectual, right? It's just super drag. But the other part of it, that spontaneity of creation and creativity, I think we are going to have to curate that and orchestrate that more. Not to where we curate spontaneity. Let's just Just get people together in a place where they can do it. That's what we're going to have to think about, I believe. I mean, I love the fact, especially as someone who's a little bit older in their career, I love innovation. I love technology. I love learning new things. Well, the way those things get created is not in a vacuum of an individual sitting in their basement in their fuzzy slippers. It's people coming together and sharing. It's collaboration and it's creativity. And that's the thing we're going to have to get back that we've lost a little bit of.

I'm picturing you in your fuzzy slippers, just so you know.

Actually, well, no, I'm really dressed. I'm not like you. I'm on camera all the time. Yeah, I know. All right. I got you.

So, tell me about this gathering in a place. What I'm hearing is for collaboration, there's a togetherness. I agree. But it doesn't need to be my office anymore. And that means I don't need to incur the cost. Do you see a rise in these coworking spaces or meeting venues?

I do. Yeah, I think we, we in our industry, I think we really, really truly do. And I also think we're going to have to be prepared to not only to come in to flex space like that or think about it this way. Large multinational corporate entity may have a hub in certain locations. They may have spokes out in suburban locations, and then their people may be at home part of the time, right? I think that we've also got to get our head wrapped around the fact that when we come together for a meeting, maybe there's 3 people in a room and there's 3 people that are out of the room, right? Remote somewhere. So it's really, I mean, you know what, what, and I know you track all these guys, McKinsey and Gartner and all these people too. So what's fascinating about this whole thing is we're confronting new ways of working work that we'd all talked about. Well, wouldn't it be cool to kind of bring around this kind of innovation or disruption? Yeah, 5 years, 10 years maybe. Just did it in a year. And now let's figure that we've got to keep figuring it out, right, as we re-enter. So it's going to be fascinating to watch.

It's going to be fascinating. You know, one thing that really intrigues me, I was talking to some buddies, they went to an event, I think it's called Abundance 360, but, but, uh, at the event they demonstrated virtual immersion, which was these Oculus. And yeah, so I, I would love to see what's your perspective of that, because it sounds like that is a way to coalesce remote work with actual, almost a tactile experience.

Yeah, yeah, I, I love that. I, I'm a sales and marketing guy at heart, so for me, part of this whole thing is not just shifting about how people work, but how do we do business? How do we sell? How do we connect with clients? In our industry, visualization, creating design solutions, literally to create a, a solution that is physicality of space becomes a real thing. So, you know, virtual reality, augmented reality, the ability to actually have employees— if a business is going to create a new environment, could we virtually walk these employees through that environment, get their buy-in, find out what they like, what they don't like? And what I'm really trying to say is yes, we use that technology in our industry, and I think it's— there are pieces that is going to stay with us no matter where we go because it can accelerate our ability to get with the client, to understand what they're trying to do, and create solutions faster. Yeah, right. I love that idea.

I love that. But, you know, it's interesting, I was talking with a psychologist on a recent interview for this podcast, and she said to me, she goes, we effectively— I'm paraphrasing— we are herd animals and we need each other.

We need each other.

We're talking about this COVID pandemic. She goes, the separation and the loneliness has caused an increase in alcoholism, drug addiction, a suicide. She goes, we need each other. And I wonder from your perspective, is that the responsibility really of the business now? Is that it? We also provide human connection and that's a big currency. That's a big deal.

Yeah, I think it's fascinating. There's some new work out. In fact, Microsoft just put out a phenomenally fascinating thing that's touching on what you're talking about. We do need to be together. You know, I get a call from American Airlines. We miss you. Where are you?

We miss your money.

We miss your money. But seriously, you know, like 67% 70% of owners or senior leaders are saying, yeah, everything's great, and 40-something percent is, we're going to change jobs this year. So there's this disconnect where we're going to have to start thinking about, and I'm not necessarily the touchy-feely guy, but we are really going to have to think about people and what they need and their mental health and helping enable them to do their very best, right, to live their very best life, which ultimately, you know how powerful culture is in business, can be a huge thing for the business, right? When, when you get everybody kind of rowing the same place. And to do that, yeah, we're going to have to think about the individual. Going to have to.

Yeah, have to. And what about integrating the client themselves? So, you know, you wouldn't say you and I work for the same business, you know, we're collaborating in a tactile experience. But what about our clients? Do we need to facilitate that too, that they need to have a human presence?

Absolutely. Yeah, absolutely. It's interesting in our industry, as you can imagine, it's not— some people from the Someone on the outside might think, "Okay, this is about selling a chair." No, it's really about helping people create solutions to empower their business. More often than not now, when you get that opportunity to sell to the C-suite, front and center is HR. It's about people, right? Leaders understand culture is, you know, it's the X factor, right? It's jet fuel if you can get that figured out and dialed in and get everybody moving together. Big deal. It's a big deal. And believe it or not, in our industry, we actually contribute to that.

Yeah, I know. I believe it. I, I'm curious about equipping for connection, meaning how can I, you know, these, some of these businesses down the street, I'm actually referring to my own business. We have the, the, you know, the, the pool table, uh, the, the ping pong, and no one uses them. They just sit there, right? The idea was collaboration, fun, but everyone's got a job to do. Is there a way, is there some ways that we can equip our office to invite collaboration, but it's not maybe the kind of kitschy stuff of the past?

[Speaker:DR_ROBERT] Yeah, I think you're right on it there. I think it's not the kitschy stuff so much as it's really kind of creating this environment where, you know, people feel, they come and they feel like they're valued and leadership says, hey, you know what, we realize your mental health, your wellbeing, burnout, whatever it is, is important. So we wanna create amenities that are authentic and meaningful to you as opposed to let's get the air hockey table. That's the sign, right, that we're looking out for you. It's more about what do people need in their lives. Can you imagine what it's like? I struggle with this sometimes just to think about because I deal with many of these people. But young designers who are married and maybe they're a, you know, it's a female designer and she's got young kids, she's homeschooling. It's kind of like, man, get my kids in school, I'll come back to the office. But in doing so, then, then they've got certain needs too, right? In terms of being able to balance all of this. I think it's fascinating Wall Street's talking about, well, we could cut down to 100 hours, you know? So burn, all these things are like, we're gonna have to deal with it. So yeah, I think there's an authentic way to create those environments as opposed to just, you know, kind of saying, oh yeah, bring the dog kind of thing. It's bringing that, right? It's bigger than that. So I think you're right on about that.

Yeah, I've heard, uh, some people say, oh, our office, we're really unique, we're allowed to wear jeans to work. I'm like, oh, that's a very, you know, '80s reference. Like, oh, you're cutting—

that's forward thinking.

Yeah, it's real forward thinking. Um, I'm wondering about the millennials. Now, this is, this is a generation— this is my perspective, not being a millennial, but my perspective is they grew up in an environment that that we, uh, and, and so a lot of the leadership is not familiar with, right? You know, I used to order pizza by calling the pizza shop and the very first time as a teenager doing that is panicked and scared.

Yeah.

But you learn how to communicate. Uh, these, some millennials have never ordered pizza without using their phone. Everything's communicated through their phone. They're, they're out. I, I've been out to dinners and I see the millennials texting each other at, at dinner. Um, they don't have the experience or the ability to communicate in, well, the traditional sense. So the question is, do we need to, as a company, teach the millennials how to have tactile experiences, or is it the reverse and we actually have to learn how to have these automated experiences? What's your sense around that?

Love your question. It's— to me, my answer is it's both. So here's what's fascinating. I'm a baby boomer, you may be an Xer, Right, I'm an Xer, baby. Yeah, so, so baby boomers were kind of exiting away. Xers are kind of doing that thing. It's— this is so fascinating, the generational piece of this. Millennials are rising up, right? And they literally worldwide today, probably the biggest workforce there is. Sure. So I think it's both. I think it's, you know, I've been very fortunate in my life, and you probably have too, that we got to stand on the shoulders of some people to help us get somewhere, right?

Yeah, yeah.

And we have to do that for the millennials, and the millennials have to be open enough. And I suspect that this last year has begun to teach some lessons of crisis that opens them up to that thinking. And we've already got Gen Z coming into the workplace, right? The oldest are 25 years old, and they're suffering, by the way, they're suffering the worst in all of this, in this pandemic. As think about being a brand new worker trying to come into one of your, your businesses. And on, I mean, it's brutal. So we got to, we have to work both ways, right? The individual contributor and the leaders have to say, what is it we need collectively together? How do we need to equip you? What is it that's important? Fascinating study out of Salesforce. They just produced this. They do this on an ongoing basis about connecting with the customer. I am amazed when I look and I see that millennials, you know what, they don't They want to connect with a business in a B2B environment in a different way. They want self-service, they want control. They don't necessarily want that traditional salesperson. What does that mean now that they're becoming decision makers? So this is a big deal.

It's a big deal. Yeah. They're going to define the entire market, right?

They are going to define the market.

Yeah. You know what's interesting too, is the millennial influence at our own business. You know, we've, we've questions I never thought about before. How much plastic do we consume? And sinfully, I was like, I don't care. In the past. Now I'm like, oh my God, that's a big deal. Even my little— yeah, my small business is a contributor or detractor from our environment. Yeah.

Yeah.

And so those considerations become important. And so—

absolutely.

Yeah. And it ties even back to furniture, like how much material is used in furniture, how much packaging is used to ship it. It's really fascinating.

It's a big deal in our industry. In fact, you know, we work— our industry works so closely with architectural design firms and commercial real estate and, and sustainability. Sustainability, it's like more than it's a nice-to-be kind of thing. You have to be. In fact, coming back into that generational thing, millennials, and millennials are now becoming decision makers. Millennials, like 37% say environment, number one issue for them. Now you could say, okay, that's a third of them, but it's a real deal. And I think the pandemic has really all made us aware of health, safety, durability. I mean, we're living in a new age. Welcome to the new world.

I love it. You know, and it's my responsibility to adjust. You know, I grew up in the '80s and it was, you know, greed is good. That was the— that was the title.

Accumulate.

Yeah, accumulate. You know, and now it's like, no, no, we have to care for each other. It's fascinating. Tell me about cost, though. You know, as we go into these dual environments, office, working from home, virtualization, It sounds like we can go kind of in these two polar directions. One is accumulating costs. I got to equip, you know, two computers, two, two, two. Or maybe, maybe it actually starts reducing costs. What's your take on that?

Yeah, I, you know, it's interesting. I think cost is always going to be a big deal, right? I mean, we know, and I love your books and your body of work. You know, number one, we always teach this. Number one predictor of profitability is the ability to control your core expenses, right? Within what you're doing. Right. And so I think where we have— we're going to have to get smarter and more pragmatic. Let me give you an example of that. And I hope I don't offend any of my friends in the commercial real estate industry. But for so long in our industry, we've seen this densification of space. Let's just cram, cram, cram, cram people. Real estate's expensive. Well, let me ask you a question. You're— you've owned many businesses. You understand this. What's the biggest expense or asset or investment in any business? Oh, people.

There's payroll.

People. It's people. It's people. So if we want high-performing businesses, we're gonna have to shift our thinking a little bit to understand what's the cost of not doing certain things. You know, I read a fascinating thing today. This blew my mind. I don't, I don't think about this so much, but think about people. Let's say you had to send people home in your business to work work, and maybe they lived in an area where they couldn't even get good internet.

Yeah, yeah.

What is it going to take for us to get really smart about what's, what's the right cost, right? In fact, I am sure you advise your clients, hey, you know what, if there's a business case here and you can see a return on this, you go there. Yeah, sure, sure. It's just about getting pragmatic for— from where I sit and what I see and what I watch.

It reminds me, I remember going into a client of mine. I had multiple hedge funds as clients in a prior business. What I noticed is the leadership team and the hedge fund manager, the nicest cutting-edge equipment, the nicest furniture, but then on the floor, the people doing the work, they get the shittiest machines broken. Yeah. I'm like, why do you give the people that are doing the work the worst tools? Um, and what I'm hearing from you is to be pragmatic, to identify the needs and to resolve those needs so our people can work more effectively. It's logical. It makes sense.

Think about the message culturally we're sending when we say to people, we're going to invest in you. We're going— and the way, part of the way we're doing that, many ways, part of the way we're going to do that is make sure, you know what, no matter where you work, you're going to be equipped to do that comfortably, safely, and effectively. We care. And, and that's a big deal, you know, it's a big deal.

So, Paul, thank you so much for joining me today. I really appreciate the conversation.

Hope it made some sense.

It did.