Audio links for original podcast:

· Here, on the dedicated Watch This Space website

· Here, on the Podcast section of my J Arnold & Associates website

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Jon Arnold

Welcome to Watch This Space, the podcast about future of work. Every month we bring you insider perspectives on how digital transformation, emerging tech and generational change are shaping the future of work. We're 2 analog guys finding the groove for all of this in today's digital world. I'm Jon Arnold and these trends are my focus as an independent technology analyst in my company, J Arnold and Associates.

Chris Fine

And I'm Chris Fine. I'm an independent consultant and strategist specializing in workplace technology, IoT, and security. My company is Integrative Technologies. Hi, everyone. Welcome to another Watch This Space. Hi, Jon. Hope it's been a good month for you. Lots of stuff happening, right?

Jon Arnold

Yeah, thank you. Same here. Good to be back on for another episode. And yes, we're in the midst of summer, but we keep working and the news keeps happening, and new research keeps coming out, and new hiccups keep happening, right? I mean, we had the recent tech outage with CrowdStrike, shutting down half the world. That just says another one of those wake-up calls about how dependent we are on all this big tech stuff. And another interesting one is certainly in the AI realm about how one of the vendors in our space, Talkdesk, was a provider for one of the big brands, I think Patagonia, who was basically recording all the conversations with customers and perhaps taking it a bit too far in terms of feeling it's like it's eavesdropping and of course, using everyday conversations to train AI models and raises issues of consent and privacy with consumers.

It just shows, how disruptive and transformative new technologies can become. And when they hit, much like these outages and security compromises, they happen big and fast. And it's kind of like, now how do we react to this? Because we're in so deep with these technologies now. It's not something we can just walk away from, right? So it's never dull, but right, you just can't shut it off.

Chris Fine

No, the CrowdStrike one's particularly interesting, and I'm hoping that Microsoft and some others really think about this, because when you've got a bazillion computers out there and virtual machines and servers, there really ought not to be something like a module of software that would prevent them from booting that way. So what I'm hoping is that Microsoft thinks a little bit more about AI and finally in Windows, they really have something studying the logs so that every time you boot up, If there's been some module that's caused more than three or four crashes in a row, you can temporarily quarantine it and take it out because that's really what they're trying to get people to do right now.

That's the only way you can fix this is to essentially go in and do a bunch of manual steps and get the system going again. Because they can't, from headquarters, they can't really fix this. They could do it on servers and virtual machines by just tapping the storage that the virtual machine is using before you actually start the virtual machine.

But if you got a laptop out there, you're kind of out of luck unless you follow these not so easy if you're not a geek steps to get it to reboot in safe mode and then you got to take this module out and It's pretty nasty, and you hope that when something like this happens that they come out of this and, make some investment in making it less likely to happen in the future. Because if you can get the particular kind of failure this was, if you have one, there's probably 100 in there that could fail that way, and you're relying on all these third-party companies. It's a lot of risk, right?

Jon Arnold

And of course, we don't know what we don't know. When it happens, we're totally blindsided because it's not something we're trained on and really feel it's our problem. That's, I think one of the biggest issues with a lot of the cybersec stuff, and unfortunately, corporate executives can be the worst offenders of all because they have the most sensitive access to data or sensitive sources to at their fingertips. And I think they just presume, IT's on it - it's not my problem. And here they go.

Before you know it, state secrets are out and it's too late. But it sure made a household name out of CrowdStrike, a company that I have followed because it kind of ties into some of the things I watch on the telecom fraud front. And there's a few of them. Orion is another one, you know, these cybersec companies, this space is, I think, Chris, just as highly concentrated as any other in the IT space, right?

Chris Fine

Yeah. I also think it's not. I mean, this is a company that you probably know them better than I do, but didn't strike me as being a fly by night or shoddily run kind of company. And apparently, as they found out more details effectively, what happened to them was some defective testing software. So you just think to yourself, you could have a really reliable company and you could have them executing probably reasonably disciplined steps, although I mean, they'll probably find, but it's tough to be in that business if you don't have some discipline.

And they're going to find, some vulnerability 3 layers in that, process couldn't have remedied and you wouldn't have suspected. So, to me, it's like they just keep adding complexity, particularly to the enterprise computing landscape. They just keep adding complexity to try to avoid things. And every level of complexity that you add adds some other kind of risk as well. So where's the right trade-off? Where's the right balance? And what could you do overall to try to mitigate this kind of class of risk?

That's where I think the opportunity is. But I don't think that's really been done. And I think that's probably at the Microsoft kind of level to do that, to allow yourself to be less vulnerable, to a mistake, a legitimate mistake or something less benevolent that could attack you in the way that this particular thing attacked machines.

Jon Arnold

Yeah. And this is what makes this story to me the biggest scare and takeaway from this that I don't hear much being said about is this was, as you say, this was a, this is human error. This was internal breakdown of, executing updates. This had nothing to do with a security breach, which is the stuff we're all, of course, really hyper-focused on, because that's where the bad stuff happens. But could you imagine if this was coupled with a security breach? Like right now, the only damage is really inconvenience. I mean, if we freak out over this, and we should, imagine how bad it could be when something really bad happens.

Chris Fine

It's just fortunate in a way that CrowdStrike isn't really a consumer program. Because if something like this happened to like a Norton, right? Or a McAfee or Malwarebytes, that would be an even bigger problem because corporations and operators of servers have a lot of central administrative capability. But if you went out to the mass of consumers on consumer machines, it would be worse, right? And as you say, suppose this wasn't just a mistake.

Suppose it was more malicious, you could probably brick a computer worse than this happened, right? Because at least if you erased a file before you started up in full mode, it would not have the problem, right? But suppose it was more malicious. You know, any kind of code that's running in kernel mode, as most security stuff does, essentially you can damage, you can make it impossible to boot up because of where you're operating. And there's just a lot of that runs on Windows and third-party code, because in Windows you need that level of privilege to do what they do. So end of sermon, but it's definitely a canary in a coal mine, right?

Jon Arnold

Well, yeah. And then you think about the recent, you know, the Ticketmaster, you know, issue as well. You talk about hundreds of millions of customer records and payment information, et cetera, being on file and potentially exposed. As I say, when these things happen, they happen big and they happen fast. And that's why, it doesn't take much in these situations to create a lot of damage. But again, we're in too deep. We can't just walk away from this. It's just, I don't know the answer.

Chris Fine

No, you can't. You got to just try to mitigate it and you just hope that. You hope that the powers that be, the big companies that are in the space, see an economic justification for working on it, right? Economic, regulatory, are you going to, because if there isn't some kind of incentive for them, they're not going to do it.

Jon Arnold

Yeah, that's the dark underside of this stuff, right? So, well, for all my competing priorities and limited resources, I got to put out the biggest fires first and doesn't leave much left.

Chris Fine

I don't even need to do that. I need to maintain my share price, which if I have to put out a fire to do that, I'll do it. But normally I have to focus on growth and market share and margin and all the other things that help drive share price. I mean, if I'm CrowdStrike, I don't want to make a mistake like that. But even so, there's probably a lot of people going in and buying on the dip with CrowdStrike, right? Because otherwise they have quite an apparently good reputation. So I don't know if the incentives are there, but certainly one would hope over time that this stuff gets to be less of a problem.

Jon Arnold

Hope so. Well, let's talk about some bigger problems.

Chris Fine

Let's do.

Jon Arnold

As if there are bigger problems. Okay. So we're going to talk about a company we have here on this podcast a few times before, Leesman. And it's one that I know, Chris, you've had particularly good history with your HPE Aruba stuff. And maybe I'll let that kind of be the lead in for it. We're going to talk about some findings from a recent what they call their corporate real estate poll and some of their reporting on what's kind of what's on the minds of top executives in terms of making their organizations. work more effectively. But Chris, why don't you talk a bit about your thread into this and what of and have taken away from your Leisman exposures?

Chris Fine

Well, Leesman Index, they're an interesting company. They're a research company. They've been around for a long time. And their forte is worker surveys and manager surveys about workplace experience. They have millions of data points that go back probably 20 years, something like that, of surveys that the employer or the organization or somebody who wants the information pays for, right? So it's not done by trying to incentivize the survey respondents. which adds to a certain level of bias.

It's more about how the company wants to find out how the workplace experience it's providing sits with its workers. And then what Leesman does is they take that and aggregate it over, or traditionally what they did is they would take all these detailed questionnaires about everything from the furniture to the atmosphere to the layout, to the day-to-day experiences to the technology and aggregate it all up so that they could create an index and then give a given company or organization and their facilities a score that had all these different components to it, but added up to how good a workplace is this. And this wasn't historically something that companies would necessarily go out and publicize.

For example, the environmental or sustainability lead LEED index in the United States of how green the facilities are. But it was super helpful to know internally and whatever level what needed to improve, what was good, et cetera. So they had about a million of these. But when going into the pandemic, they started to also focus more on what needed to change, and especially coming out of the pandemic. And as part of the work with HPE, we commissioned them to do a study at the beginning. It was published in 2023, and we've talked about it here, about workplace trends coming out of the pandemic.

Leesman started to do more and more of this work on their own and for other customers. And Jon, the particular report you're talking about is one that they published recently about what's on management mind balancing the different requirements and pressures in the workplace today in a hybrid work. What I found interesting, and we could talk about it in more depth, is that management, according to Leisman, is still very much juggling a bunch of different priorities and the answer of the future of hybrid work and the workplace is still far from clear.

And that's not a bit different from what you and I have said on a number of podcasts from different perspectives. But that was my essential takeaway of what the newest Leesman survey of corporate real estate managers, which is the other group survey they do, was showing. It's like there's a lot of unknowns and there's a lot of need to understand better on senior management part of what's going on and what workers are thinking and where they need to be to get ahead of things, right?

Jon Arnold

Yeah, there's a lot there, Chris, for sure. And let's start this conversation with two big picture ideas here that I think will come into play. Offline, you noted in some of this recent research that identifies a lot of these issues that corporate management is dealing with. The first thing is, they're not talking about AI, right? This report is not about AI. It's not looking for solutions that are AI-based. They're just raising this idea that there's a messy mix of priorities that they're trying to manage. So when we talk about, you know, in our focus as future of work, thinking, well, what does it take to make that workplace really attractive? How do you balance work from home, return to office and motivation and retention and training and all the things you need to do to make an organization effective.

Those are real issues. They're not necessarily AI solutions per se, and this report isn't talking about that. But another underlying theme to all this, Chris, I know we've known this for a long time, is that when it comes to making decisions, top management in particular wants data. They've really, I think, for some time now, have adopted this model that decisions have to be data based to justify them. So there's a lot less of that. here's what I think we should do, guys. It's more like, what do the numbers say?

And this isn't just in the corporate world, of course, you can see it just about in every facet of our lives that we have metrics for everything now. I'm a sports guy and analytics has kind of taken over the way sports are done now. All the coaching and training and performance issues around how athletes do their jobs, so to speak, are driven by numbers, right? There's so much instant information available and it's tracked from every possible angle. And the workplace isn't quite there yet. But management is still very much in that mode of the more data we have, the better the decisions we can make. And frankly, around these issues, and we'll talk more about them, that they call workplace strategy in the study, there's not a lot of data.

So my thesis for all of this is, well, that's exactly what AI is built for. Maybe there is a way to look at this problem set that AI can be part of the solution here because it certainly is tailor made for the kind of things that management is looking for but doesn't currently have. And it doesn't seem to be a model in place that helps them manage all of these priorities and balance all of these needs. So there's obviously a need here for something. And I'm just putting forward the idea that the kind of AI we're seeing in the worlds of collaboration and contact center, et cetera, which are very effective, you know what? When you start looking at what's important to management, it's not that far off. It's not that big a leap to say, you know what? These platforms that we use in contact centers and workplace might have a higher purpose or can help with these higher purposes. That's kind of my thesis of all of this.

Chris Fine

Well, you have to start from the business problems and work down, right? And so business problems are things like how much real estate do I really need and what kind in order to function properly? And then how do I get people productive? How do I increase or maximize or measure productivity? How do I retain good people? How do I manage the scheduling and mechanics of hybrid work? So again, productivity and efficient use of facilities. And the whole idea of this, which I agree with you, would be a great subject for some AI analytics.

Part of the problem is it's just in a very emerging space of even getting the data. And the other part of the emerging space is to help articulate the problem in a precise way, right? Because for all of these things, you can't just wave your hands and kind of say, I wish things were better. I don't know what's going on. And what I find in a lot of conversations with different organizations is spend a fair amount of time just helping them get to where they, what are they really trying to analyze?

I think that if you ultimately were to have better source data and more coordinated and integrated data, AI could help you with that too, right? Because you could point out, hey, you know, people aren't using the space, it looks like at ABC, what do you think, right? Whereas, you know, if you're normally, if you're the person in charge of thinking about these problems or the team in charge, you first have to do a lot of work to articulate just how do you want to think about the problem of work and the workplace and what data do you really need and what's that going to tell you?

One example of that is, let's say you're trying to do utilization or occupancy analytics, which is basically where are people working and what's the traffic patterns and how are they using different kinds of spaces and what's the overall occupancy, day one, day two, whatever, days a week, hours, et cetera. Well, there's a whole bunch of different ways you can try to get data for that with different levels of cost and complexity and technology. And it's easy to either under engineer or overspend if you don't try to figure out what you're actually trying to ask yourself. And what data do you really need? And that's a huge challenge just in itself. And when you have management kind of orbiting around the conflicting priorities that Leesman talks about, it makes it even harder to just say, okay, here's a plan of attack. This is what we're going to do, right? It's not like building a new plant or a new factory or something. You need to understand what problems you're trying to solve, right?

Jon Arnold

That's a good point, Chris. I haven't thought of before that we're just talking about the current situation. Work with what you got. What are your current problem sets? What you just mentioned though about, yeah, it's not like building a new office. That is a whole other scenario, right? For maybe new companies, how do we think about what a company that's totally digital today from the ground up has got to look like?

That's a different scenario because you can truly engineer your entire organization around data that you can readily track and you can start fresh, clean slate. But the real world doesn't work like that. We're talking about big, clunky organizations. And when I look at one of the charts from their summary report shows the priorities and when we talk about the business problems, like what's the most important thing and all the things they're trying to balance. So just to very quickly cite 3 examples and you just touched on one of them, Chris, is optimizing office space utilization. That's a real thing and it's clearly about a lot of metrics.

Another big one is employee experience. How do we measure that? How do we take steps to make that experience better and keep those people retained and motivated, et cetera? And another big one, of course, every organization struggles with is cost reduction, cost management. Again, that's all numbers. And if I just even just talk about those 3 examples, and there are several others in their summary report, when you think about you know, certainly closer to my everyday world of communications, collaboration, you know, the world of unified communications and to some extent contact center.

But you see in particular where it's all about productivity and workplace environment, those platforms are already capturing a lot of this data. So when we talk about, well, where's the data going to come from? Well, you actually have it, but It doesn't address every need, but it addresses some of the big ones. And it might, what I'm trying to get to is to think about, well, you have already, you're already partway there with a solution that could help you that yes, it's AI driven, but what it's really about, it's covering the areas that are important to making your organization run more effectively. And the problem, of course, that we see, Chris, and it too, is so much of this is siloed, right?

When we think about UC, it's kind of like, I call it a point solution in effect, that it addresses a particular set of problems, but it's not an organic part of a bigger strategy. So the Leesman report talks about workplace strategy. How do we formulate a better strategy? And that's a real Gestalt kind of thing that encompasses everything, but you can't have a strategy so what the pieces are and getting data on those pieces. So contact center does what contact center does.

There are different buying groups within organizations and budgets that manage these things. So they're not deploying these solutions in ways that really work into this bigger strategy that organizations are struggling with. And this is part of where I think AI coming into the picture can help them rethink some of this stuff and say, you know what, there are tools that you're using today that I think can go a long way to helping you manage the strategy need that you have because clearly they're struggling with this and they don't seem to have the tools or know how to look for where they might be.

Chris Fine

Yeah, agreed. But there's another element to it that is related to what you said. I agree with what you're what you put forward, but there's also the ROI element. And that's an interesting one, right? Because they have to look at all of the, one of the ways that you traditionally analyze a business case for one or more of these priorities that are, you know, the ones you ticked off are basically juggling with each other, right? Customer experience is fundamentally an expenditure, right? Whereas cost saving is cost saving. And so how do you find a happy medium where you do what you need to do to make meaningful impact on things that are hard to measure, they're not that quantitative, like experience versus cost, which is very quantitative.

But what you also need is like, what is my fundamental rationale for making investment? And one thing that's I think been a struggle in the past has been to find that, right? Like how do you measure the ROI on some of this stuff? You can certainly measure the ROI on reducing real estate. So that's a pretty straightforward. But a lot of this other stuff is fairly soft.

What's happening is kind of interesting is there's an increasing correlation between actions that you can take to understand your environment better and know your data better and act on that data and then sustainability, energy costs, health and wellness. And if you, in my mind, if you want to look what's going forward, look at Europe and look at how much instrumentation and analysis is being put into buildings with a good ROI based on legal requirements for sustainability and actual cost savings. And so I see that as somewhat of a unifying force, but I think in the absence of that, and that's not quite as advanced in the US market, but it's getting there. It's starting to move toward more climate awareness, workers want sustainability, health, wellness, post-pandemic.

That could be an actual business case for doing some of these things. And I think that's interesting for the field, But without that, you've got all these priorities to juggle that Leesman has laid out in this report. And if I remember, there's probably eight or nine of them. And like what business analysis and traditional strategic analysis case method do you use to find which direction you're actually going to go? And that needs to be clearer. And also the approaches need to be more straightforward, less box of Legos, as I always say, and more straightforward technology that rolls up to stuff that very senior people can look at, right?

Jon Arnold

Yeah, more complicated case studies in MBA school around this stuff than we ever had to deal with in our academic days, I'll tell you that. But what really struck me about this analysis is that yeah, if I'm in the shoes of a corporate executive tasked with this bigger picture, what's our workplace strategy going to be? It's clear to me from the Leesman data that this is a really difficult set of priorities to manage. And I, again, coming back to, well, you got to have data. I mean, you can't just make this stuff up and run it off the cuff because it's just too many, as you say, too many Jenga pieces here that you get them out of sorts and then you make things much, much worse. and really hard to fix.

I realized, Chris, for our listeners, it's hard to visualize this stuff. So I haven't mentioned yet that I did write an article recently in No Jitter that kind of tries to articulate this with a couple of visuals and link to the Leesman summary report. So you can certainly explore that on your own. And another piece that we haven't touched on yet, Chris, is this is what brings the AI piece into the story that I feel is important is I drew from another recent study.

This is from McKinsey, and it's actually tied to a massive study that Stanford University does. It's like 500 pages. It's really insane. But they're looking at kind of the bigger picture of AI use cases and how it's evolving. And it's global and it's really fascinating. But one piece that stuck out from that is some of the McKinsey research that they showed. And in particular, I included a chart in my No Jitter article about this, that looking at the priorities, what organizations are investing in for AI? Where are they spending their money? Talk about ROI, right, Chris, and the metrics.

Well, virtually all the top use cases they're investing in for AI are pretty much customer facing external applications that are really about driving basically top line. Maybe a little bit about cost reduction, but it's about customer acquisition, improving the experience of your products, innovation for your products, stuff that makes the sales numbers go up basically. And nothing there in terms of where they're spending their money about these internal strategy needs of the organization, stuff that, as you say, affects employees, impacts your culture, your morale, things like that.

So when you talk about where the dollars are being spent for AI, it's not about that. They're trying to get to the biggest impact and the least amount of time, and that's, of course, how do you drive sales and damned about how your organization responds to keep up with that. That's what that says to me. Again, it's telling me that I don't see solutions coming here that are obvious, that says, okay, well, where are the IBMs and the Accentures of the world coming up with these AI platforms that tie all of this stuff together, the ones who should know about these things? I'm not seeing that yet.

That's not to say it isn't coming or isn't out there, but it's not evident to me at the moment. So my final takeaway for all this, Chris, is that so for the UCaaS and CCaaS vendors out there who are trying to up-level and sell up into the organization and be more strategic with their offerings, might want to start thinking about workplace strategy as something that they're already have a few irons in the fire already that they're addressing. To me, they're in just as good a position as anybody else, if not to be the solution, to be part of the solution that I think management would be very receptive to.

Chris Fine

I agree. So you're more of an expert on this stuff than I am, but I'm going to throw forward two things that in my work I think would be hugely helpful for you to keep on working on. One is I really think that this idea of communicating an inclusivity of participants in a collaborative experience who are in all kinds of different places is important. And to keep working on this hybrid, are you in person, are you not in person kind of empowerment of everybody to be treated equally in collaboration, I think is one of them.

The second one is how much data can you aggregate from your products and put it out on an API that can be tapped by workplace analytics, right? Because typically collaboration, AV, UCaaS equipment is expensive and it's really learning a lot about what's going on. So how much without abusing any kind of privacy or providing at least a customer of choice of levels of disclosure, how can you then feed into an overall integrated system to get a sense of what's going on in the workplace?

You know, how do you become a sensor platform as well as just a communication enabler? Because then that immediately increases your value, and makes you more strategic. So I think those two things would be really good to see more of out there.

Jon Arnold

Yeah, exactly. But again, it comes back to, do you see yourself as essentially what I would call a point solution? You're very good at contact center, customer experience. Okay, that's great. But you know what? You're not that far away from being a higher, potentially being a higher value piece in solving bigger problems that organizations are really struggling with.

Chris Fine

You also have to cope with different groups of buyers, and that's another proper conversation. the enterprise person whom you sell to, who buys conference room collaboration equipment, is that person aware of some of the larger strategic things? historically not, but I think that's changing.

Jon Arnold

It is, because I've heard that from some of the recent vendor events I've been at, is that they're thinking bigger. that in other words, we're not just trying to make communications more efficient. We're trying to change the whole way you work. And when you have that kind of conversation, it's a little closer to what the Leesman study is talking about than just how do we do more video calls.

Chris Fine

Right, and how to, you know, now that you can, I mean, you still have to do all the engineering and the quality of service and the security and everything else, you absolutely have to do that. But I do think there's now a table with more senior people around it that's thinking about some of these things, past IT. And this stuff is no longer the modern-day equivalent of phones, if you put it sort of in a crude way. And I think inevitably, once that table is established, where this type of workplace issue gets into a strategic level of discussion along with overall business strategy and everything else, then it's a different dialogue than it used to be.

If you're going to be a participant in the workplace technology or workplace facility ecosystem, I don't think you can proceed any longer without participating in that some way. and not being a silo. You just can't. And as that increases, then you can add the AI because all of the data is more presented in common ways. And thus you can analyze it, right?

Jon Arnold

Yeah. So term of the day, folks, workplace strategy. It's not entirely clear what it always means, but I think it's a thing.

Chris Fine

I think it's always been a thing, but I think it's more of a thing because there's more of the aspects of organizational life that are around it, like money and resources and facilities and capital expense and operating expense and regulation, these larger kind of phenomena are getting more and more associated with an element of organizational life that when I first started a zillion years ago, it was like, was my PC working or not? Even before that, and that was a very tactical kind of thing. And it's just gotten more and more strategic over time. Now it's actually tied into big strategy, and I think the vendors and all the ecosystem stands to benefit from understanding that.

Jon Arnold

And we're here to help you solve that problem. All right, okay, so the first one's free. So we will call it a day for now. But I think folks, I hope you've stuck with us this whole time today because it is an interesting topic that I think has more legs to explore. And I just hope maybe we've opened up some new dialogue possibilities and we'd love to hear your thoughts on that.

But that's time for today, folks. So thank you for listening and hope you enjoy the podcast and you'll continue with us as we explore the future of work here on Watch This Space. You can access all of our episodes at www.watchthisspace.tech, or wherever you subscribe to your podcasts. And of course, we'd love to get a review, a rating from you, and of course, ideas. If you have themes you want to see us explore, we're right here for you. So with that, thank you again for listening, and I'm Jon Arnold.

Chris Fine

I'm Chris Fine. Thanks, Jon. Always great to be with you on the podcast. Thanks, everybody, for bearing with us and listening. And we'll see you next month for another episode of Watch This Space.

Companies mentioned:

CrowdStrike, HPE, Microsoft, Talkdesk