Workplace wellness: the main players

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From the woman who advised Google on developing what became one of the most copied workspaces in the world to one of the UK’s biggest property companies, the champions behind the wellness movement are some of the world’s biggest players. Emily Wright met three

The global guru

Despina Katsikakis

Whether you are a developer, a landlord, an occupier or an investor, if there is one person you should have on speed dial, it is Despina Katsikakis.

despina_katsikakisBecause the ground beneath workplace design is shifting. Not year on year. But every month, week, day, hour. And, in some cases, every minute, even every second. So how can companies possibly keep up?

Well, Google calls Katsikakis. So does Sir Stuart Lipton. And the BBC. Siemens? Unilever? Microsoft? They all do too. And these are companies and individuals with stellar reputations for being one step ahead when it comes to delivering office environments that actually work. Both in terms of giving staff what they want and, crucially, driving profit.

So what is it that Katsikakis tells them? How does she boost her clients’ commercial performance and the wellbeing of staff through the physical attributes of a workspace? And why is emulating Google the worst thing anyone can possibly do on the quest for the perfect office building?

The basics

The first thing the property industry needs to know about Katsikakis – a trained architect herself with 30 years’ experience in the field of workplace transformation – is that she understands that the ultimate goal for any business is to make money.

It is a reassuring attribute as she talks passionately around the benefits of wellness and staff satisfaction. Because in the midst of such topics that some might dismiss as wishy-washy or airy-fairy, Katsikakis is hell-bent on formulating each and every one of her arguments around a hard business strategy. Arguably proving each and every one of those people wrong in the process. Not by preaching. But by explaining.

“Businesses need to make money to be viable,” she says, straightforward and crystal clear. “So as an industry we really need to know what is going to disrupt the way we work, and live, and then design and manage buildings to be resilient enough to support their investment value. And, at the same time, be responsive enough to support the business value for the occupier.”

Resilient yet responsive. Katsikakis concedes that delivering both presents a challenge. But by no means one that cannot be overcome. It is one she has addressed on schemes from Broadgate to 22 Bishopsgate. The trick, she says, is to keep it simple.

How to stay flexible

Simplicity, she adds, is the enabler of flexibility. And, as most people already know, the only way to keep up is to stay agile: “What I always tell developer and occupier clients is that the one thing you can guarantee is that you will not be the same organisation that moves into a building as the one you were when you were planning it. The business context will change. The people will change. You have to be constantly planning for change.

“Simpler buildings become containers of a dynamic process. Then the more they can respond to change. Buildings are layers of time. The shell, the core, the structure will be there a lot longer than the partitions, the furniture and the interiors.”

Here she uses the offices of San Francisco tech firms and start-ups as an example. Businesses which, by and large, start off in sheds: “Very simple containers for a dynamic culture,” she says. “And then the interiors are developed to support that culture.”

And therein lies one major point to remember. Interiors must be developed to support the culture of the business in question. Emulating what worked for someone else doesn’t cut the mustard. And Katsikakis should know. She was a driving force behind one of the most iconic and copied workspaces in the world.

“When we did the vision for the Google workplace, the look was copied all over the world. But people didn’t understand what it meant,” she says. “It was a physical manifestation of the cultural values of Google. It wasn’t a transferable solution.

“People copied it because it was easy. They thought, ‘We will put some funky chairs in and a break-out space and people will be innovative and collaborative.’ But a building can’t just do all of that by itself. You need to engage to understand the culture of a particular business. Otherwise you could well end up with a space that looks great but does not fit with the culture at all. And then the space will fail.”

She says that deciding on an end goal and working backwards is the only way to really make sure a workspace delivers what the stakeholders want it to deliver. “It is working backwards,” she says. “So what is the outcome you want? What behaviours do you need to engender that outcome? What physical environment do you need to support those behaviours? For example, if you are trying to increase cross-functional revenue, then you might need to increase collaboration across the business units and then you may need more social space. But you have to know why you are doing it.”

The issue of wellness

And that takes her on to the subject of wellness. A concept that, in theory, sounds faultless. Why wouldn’t you want staff to feel healthier and happier at work? The answer, of course, is simple: if it does not have a commercial benefit.

While Katsikakis concedes that empirical evidence of wellness and wellbeing contributing to commercial success is still hard to find, anyone with an iota of common sense should be able to see that this does not mean it does not have clear business benefits.

“Corporate real estate executives, for the most part, are rewarded for delivering savings,” she says. “So with wellbeing, I can see it is tricky. Who does responsibility for that sit with? How do we measure success? There are new tools coming into the industry and I am coming up with a measurement metric for 22 Bishopsgate to prove that a building that focuses on the health and wellbeing benefits for people makes commercial sense.

“But until then, it is just sense, isn’t it? Wellness, and how people feel when they walk into and leave the office, is so important to the success of a company now. Because work is no longer somewhere you go. It is something you do. In that context, you can work anywhere.

“So why would you choose a particular place to work if you are bright and talented? You would choose the one that makes you feel happier, healthier and more energised.

“Buildings are now places with the power to attract and retain staff. So the successful workspaces of the future will be the ones that make people feel good. The ones that give them a memorable, positive experience.”

• Listen: Katsikakis talks to EG about the connection between the workplace and productivity

The New York giant

Paul Scialla

“Anyone you ask will be interested in how the 15 cubic feet around them impacts their life and their health,” says Paul Scialla. “Once we start to understand how the four walls and the roof surrounding us can affect our cardio health, immune systems, our digestive and respiratory health, I think we will all care where we live, work and play.”

Paul-SciallaNearly a decade ago Scialla, a partner at Goldman Sachs, found himself becoming increasingly curious about the impact of the built environment on its occupants. Unable to get the thought out of his head, he brought together a number of architects and medical experts and posed a question.

“It was a provocative question back then,” he says. “But I asked them this: ‘If you had to dream up the ultimate list of what we need to do to build preventative medical solutions into the built environment, what would it look like?”

Seven years on, Scialla is chief executive and founder of Delos, the world’s first health-centric real estate development company, which launched the Well standard for the built environment.

The certification, introduced in 2014 after a pilot programme in LA the previous year, is now applied to 200 buildings across 14 countries and is fast becoming the next big thing in global building standards. Leonardo DiCaprio and Deepak Chopra sit on Delos’s advisory board, and Sir Stuart Lipton’s 22 Bishopsgate, EC2, is set to become the UK’s first Well-certified building.

So just how important is the standard? And is there enough empirical evidence to reassure the real estate sector that it is more than just a passing fad?

Commercial benefit

Scialla is quick off the block here, explaining that when he came up with the idea it was not based solely on social drivers: “I very much had my Wall Street hat on at the time,” he says. “I was curious as to what sort of economic opportunity there would be if we brought together the largest asset class in the world with the fastest-growing industry. Health and wellbeing was worth $3tn (£2.1tn) a year back then and has been growing at a rate of 20% every year since.”

But what about the evidence to support whether there is a commercial benefit? Does that exist? Scialla insists that it does, even if the certification is still at such an early stage: “If you look at the ongoing cost of any building, more than 90% of it is represented by the people inside of it. Salaries, wages, benefits, production, retention. Energy, on the other hand, represents less than 3%. And look at how successful the sustainability agenda has been.”

And he is quick to dispel any misconceptions that being Well-certified means hefty upfront costs: “If we look at the early evidence with regards to Well implementation across 200 projects in 14 countries, the necessary actions are defined by making more intelligent and informed decisions, not more expensive ones. So far we are seeing that the incremental costs of bringing the Well certification to a building are anything between zero and less than 1%. This is not a 15%, 10% or even 5% cost-added proposition.”

The criteria, set after five years of academic, medical and political vetting, includes standards for natural light and air quality (see link below to download the full document). And, in 2013, Delos’s team brought forward their idea of what a Well building standard might be before awarding the first certificate to the CBRE headquarters in LA.

But Scialla adds that the standards can, and should, be applied across the built environment and not just in relation to offices. “This should be for everyone,” he says. “Health and wellbeing is a right, not a privilege. The standard should be applied in offices, homes, throughout the leisure sector. And registrations for the certification are coming from all areas, for affordable housing units right up to prime luxury.”

Movement or fad?

Back to the question of longevity, though. Just how relevant will wellness and wellbeing actually be in five years? Is there a danger that the property sector worldwide could jump on to the bandwagon of a trend that becomes a fad as rapidly as it became a must-have?

Scialla thinks not, and his argument is compelling: “We are in the midst of a wellness revolution. Millennials have grown up with a wellness version of an offering across most products. So where is the wellness version of real estate? This won’t be a fad. We need to deliver poor-health prevention into people’s daily lives. We can’t keep dealing with preventable illnesses after they occur. And we feel one of the most impactful ways to deliver prevention is to look at the built environment we are spending 90% of time in and address it head on from the outset.”

The British bulldog

Matthew Webster

Matthew-Webster

It all comes down to proof. That is the crux of the matter for the man behind British Land’s wellbeing strategy. Not so much for him personally – Matthew Webster needs no convincing that wellness should now be on every major property company’s radar – but for the occupiers, chief financial officers and anyone else with an economic stake in the business. “Why does this make commercial sense?” is a question he is used to answering. Regularly.

“The benefits of wellness and wellbeing are so clear to me,” says Webster, who took on his new role in 2014 after joining British Land in 2010 to head the group’s sustainability strategy. “We know more about what we put in our bodies now than what we put our bodies in. And the impact of the buildings we spend our time in on our health and happiness is so significant. But there are commercial imperatives to embracing wellness. And that’s what helps get other people
on board.”

But as most people will attest, when it comes to measuring the financial benefits of wellness, it is still early days. And, as Webster points out, empirical proof will most likely always be hard to quantify in this sphere.

“When I joined British Land, I was charged with making 40% energy savings by 2016. Which we did. And that’s very easy to measure. I am not sure wellness lends itself to those sorts of figures, but there are ways out there to prove the commercial benefits.”

He points to British Land’s York House, W1, as a case study. The REIT’s new HQ is ground zero in terms of the company’s wellness strategy. It has been carefully developed to integrate – among other things – optimum noise and light levels, sensory-led design elements and more than 800 plants to act as natural air purifiers.

Results of pre- and post-refurbishment surveys show increased staff satisfaction of up to 40%. Absenteeism is down and productivity levels are up too, though it is still too early for exact figures.

“This is where the chief financial officers really sit up and take notice,” he says. “When we can prove productivity is up to the point where it has a significant impact on the bottom line.”

And the occupiers? “Some are very interested and others, not so much. I think there are still varying levels of awareness. At the moment, we are focused on this with one or two key occupiers across our portfolio, but the ambition is to apply it across the board.”

Here he reiterates Scialla’s point that wellness should not stop at offices. This is a concept British Land wants to apply across the board from retail to residential, with the ultimate goal to use the built environment in its entirety to make people healthier, happier and more energised.

“The NHS is stretched,” says Webster. “We have a system based on cure rather than prevention, and the hope is that the built environment has a part to play in taking the pressure off by focusing on the latter.

“Ultimately, as developers, we have the power to make assets better environments for people to work, live and play in. And reap financial benefits at the same time. So now we just need to keep moving forward in that direction.”

• To send feedback, e-mail emily.wright@estatesgazette.com or tweet @EmilyW_9  or @estatesgazette

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