The Birth of Well Buildings

In 2007–2008, Paul Scialla stood in the eye of the financial meltdown storm. He had recently made partner at Goldman Sachs, along with his twin brother, Peter. But, within that same time frame, the Scialla brothers had also developed a side project, exploring the relationship between buildings and human health and happiness. In 2007, they cofounded Delos, the company to carry that vision.

In 2013, at the age of 39, both left Goldman for full-time commitments to Delos. Delos first focused on improving the conditions in the hospitality industry. MGM Grand Hotels gave them one of their first projects.

At that time, Lew Horne knew nothing about the Scialla brothers. And they had never heard of Lew. But the paths of their lives approached a fortuitous convergence. And it all happened because of the flu season in Los Angeles. In a minuscule-but-momentous event, someone sneezed in CBRE's new open office. Then he or she made a casual comment, “I wonder who will catch my flu?” And that question seemed to float throughout the building.

When the question reached Lew, he caught the significance; he knew the concern and hesitancy about a shared workplace and furniture. He admitted, “I never thought of that, but immediately wondered how we should address it.”

He knew he wanted to find an effective solution that avoided chemicals. CBRE's Onno Zwanefeld knew Paul Scialla and his work with Delos. Onno introduced Paul to Lew.

And that is how Lew and Paul came to work together on translating Delos' hospitality standards for the workplace. The CBRE headquarters became the first corporate workplace to receive the WELL Certification for a commercial office space through the WELL Building Standard™ (WELL) pilot program.² Visitors jumped from about 30 people per month (in the old office) to more than 1,000 a month. That pace continued for over a year. People came to see more than leading-edge design. CBRE experienced a business and culture transformation with wellness at the core. Was that transformation just lightning in a bottle or was it an idea whose time had come?

The building came as a rainbow in the thunderhead that, although abating, was still darkening the economy.

At that time, I only knew about the astonishing response to CBRE's new workplace. I did not know about Lew and Paul's new venture. But because CBRE kept ordering copies of Change Your Space, Change Your Culture, I returned to California to meet with Lew; I wanted to hear about life after the project. He was still excited about it; he said the new space had sparked a radically new kind of conversation that was truly centered on the employee and their happiness and health.

He described the dramatic public and internal interest in the project. He said it had taken them all by surprise and had also become a catalyst for broader business change. Lew knew the topic had a big head of steam with both positive and dangerous potential. Even at that point, in 2014, some people saw wellness as the new bandwagon. And everyone knows that bandwagons are to be jumped on. That mass appeal made it difficult for business leaders who tried to take wellness seriously. Lew did not want to see their success and interest tainted, similar to the way early sustainable building efforts were labeled as “greenwashing.”

Then we imagined: “Could we mobilize a group of corporate leaders and experts to look further into this trend and perhaps create some form of clearinghouse for workplace wellness?”

I agreed to spearhead the effort. After reaching out to and for the right people, we found 12 leaders who agreed to take a day to meet and discuss the implications of this interest in well buildings and the larger question of workplace wellness.

In the summer of 2015, I returned to CBRE, accompanied by Paul Scialla and Phil Williams from Delos. Our group included other recognized leaders within the overlapping worlds of design, construction, and wellness including Mabel Casey with Haworth, a longtime supporter for several MindShift projects. CBRE's Lew Horne and Dave Pogue hosted us.³

We tried to make sense of the incredible public response to the project and process. We explored how the new design for a healthy workplace changed CBRE's culture: it shifted behaviors, improved morale, and transformed their operations. What was different about that project? Why was there such an enormous response and what does it mean? Because the commercial real estate industry typically operates outside the corporate wellness conversation, we felt the need to learn more. What did wellness and well buildings mean for the future?

The Workplace Enters the Wellness Conversation

We all saw that the CBRE-Delos collaboration was historic. We believe it was the first time that the workplace, as an instrument of wellness, seriously entered the conversation. Workplace wellness was certainly not a new topic. The war against rising medical costs and, of course, the drive to attract and keep talent and improve low employee engagement had been on the minds of corporate leaders for several decades. But those efforts fell primarily into the HR world. With CBRE-Delos, the workplace, for the first time, burst on the scene as the potential game-changing weapon in that war.

Our gathering in LA shed light on another question. The wellness industry had not kept up with the growing size and complexity of the health cost and chronic disease crisis. It was all a confusing mash of programs, vendor business models, short-term strategies—little continuity and a lot of fragmentation. It seemed destined to produce a vicious cycle of fixes that would fail.

Humanizing the Workplace

Following the economic storms of 2007—2009, our group really caught sight of a shimmering rainbow of new possibilities.

The CBRE-Delos work also turned the various issues into a human conversation. We all had to look at wellness through the lens of (1) workplace environment, and (2), employee experience, health, and well-being. That would be a departure from a traditional focus on buildings, operations, costs, and amenities. The separate worlds of real estate and human resources had collided. Could we build a bridge with those in the land of wellness? If so it would dramatically change the calculus in the competition for talent and corporate responsibility.

The potential effect of environment on happiness and health seems intuitive. However, office buildings are seldom designed for humans. Most are viewed as economic units that compete against other buildings. Cost, speed to market, occupancy rates, rents, operations, and cash flow all drive the birth and life of such buildings. The shorthand for that calculus is called a cap rate. Few buildings escape that assembly line rationale. Unless a developer can link the cost of iconic design or an enhanced user experience to higher rents, the process reverts to buildings and the people who will work in them becoming mere commodities.

In Paul Scialla's eureka moment, he imagined building values based on how they improve the lives of humans. As a Wall Street guy, he was not blind to the economic and market forces that drive commercial real estate. He saw buildings that improve human lives as the ultimate high-return investment.

Knowing that more than 80% of a company's exposure is the cost of its people, and people spend more than 90% of their lives in buildings, what would it take to turn any building into a platform that improves the health and well-being of its occupants? In other words, what kind of return on that 80% invested in people is plausible, possible, or feasible, based on a healthier building? What is it really worth to provide a friendly and supportive environment in which people can do their work?

1%, 5%, 10%, more?

Human performance and the business case for buildings is seldom a coherent and cohesive argument. David Radcliffe, vice president of real estate and workplace services for Google, asked one of our summit gatherings, “Are we squeezing pennies to reduce building cost and losing dollars of engagement?”

Good question.

I came out of the CBRE meeting in Los Angeles like a sparrow caught in the jet stream. I was moving very fast. Working with 12 prominent leaders excited about workplace wellness felt like being on the ground level for a new startup. It was a disruptive idea, moving our industry's focus from environmental sustainability to human health and happiness. I knew what to do: assemble the best and brightest from the wellness, architecture, construction, workplace, real estate, healthcare, and academic worlds; convene in quarterly summits across the country; research, synthesize, and write.

I thought research for a book on workplace wellness would be a simple extension of the work we did in Change Your Space, Change Your Culture. We had already addressed stress, health risks, and the emergence of well buildings. Our mission appeared straightforward—how do we bring corporate real estate and human resources together? How do we adopt the best of workplace strategy and design to enhance the best in workplace wellness? I wore my expert hat, and it felt good. Surely, we could move this conversation forward in significant ways.

Our first adventure would begin to learn the language and customs in this world of wellness. We assumed that world existed to solve a problem. Those inside the wellness world seemed to be clear about their mission and effectiveness. However, one rabbit trail led to lowering risk and cost. Another ran to attracting and retaining talent. Another wanted employee engagement. But none of them ever intersected or produced what they had promised. I assumed my questions and skepticism just reflected inexperience and lack of knowledge. My questions were like pulling a loose thread on a sweater. That unraveling began to attract the attention of an emerging band of iconoclasts, true believers, and reformers.

Exposing the Wellness Industrial Complex

From the beginning, our MindShift team agreed that our challenge was how to understand and articulate the wellness story and provide a roadmap through that territory. And we quickly, earnestly, and aggressively moved into that mission.

But, then I met Al Lewis.

The Harvard-trained guru of disease management, Al is the disruptive force, the enfant terrible, of the wellness world. With his rumpled khakis, navy blazer, and finger-combed brown hair, Al stands on platforms and flails his arms like the balloon man at a car wash opening. As the man with the facts, he is fearless, even delightfully provocative; “Please,” he says to wellness vendors, “Sue me. I need the publicity!”

When I met him, he recounted his history and success, followed by his sudden repudiation of the very discipline he started. Like a character in a novel, Al had a crisis of conscience; he saw the clear and certain evidence that his own work produced no improvement in health or health costs. In fact, it created the opposite. In that interview, he identified all the major wellness voices; he bluntly called some liars and scam artists. I had already interviewed many of them for our project; other interviews were scheduled.

Our conversation threw me off balance, but I was intrigued. With Al's permission, I sent the recording and the transcript of our conversation to our Well MindShift team.

The first phone call hit within the hour. Our leading wellness expert and cheerleader was rattled and alarmed. She warned me that Al was poison to the wellness conversation. Within a day, I was uninvited to a wellness event sponsored by a leading wellness consulting firm. The reason? They heard I had interviewed Al. The level of intrigue increased. Cue the Jaws soundtrack.

Then Al introduced me to Tom Emerick, former head of benefits for Walmart, BP, and Burger King. I flew to Arkansas and stayed in Tom's guest home for two days. Tom, a former petty officer in the US Navy, stands in a military posture. His gray hair and Muskogee, Oklahoma, flat drawl lend an air of warmth and accessibility. But his command of facts can be intimidating.

Tom drove me through the countryside as he told me his story. He started his career as an actuary. That's important to know because he was the only person out of all the academics and health experts we interviewed who actually examined the health and mortality outcomes of different wellness approaches.

His left-brained, dispassionate, monotone, genius-level recall buried me in facts, studies, and decades of field experience. After all, he worked with an employee population of over 1 million for 11 years. I recorded our two-day session. That thread further unraveled the wellness garment.

In fact, it was beginning to look like this emperor had no clothes.

Then Tom introduced me to Soeren Mattke, author of the 10-year RAND study on the effectiveness of wellness programs. Mattke, a graduate of the University of Munich in his native Germany and Harvard, is a cardiologist and a leading global health policy authority. He sometimes speaks with the wide-eyed glee of a 12-year-old who has discovered a trunk of kryptonite in his basement.

Mattke's research shredded an entire industry's core narrative. Wellness programs don't work; the money invested is wasted. He opened the door to Jeffrey Pfeffer, who wrote the book Leadership BS. Naturally, his book makes the case that the positive management narratives are exactly as identified in his title.

Several organizations—including WELCOA, the largest nonprofit wellness education organization in the United States—reinforced the industry's need for change. These experts spun us 180 degrees from where we thought we were going. Very simply, no one else had yet connected these dots and distilled the information into a cohesive and comprehensive story and roadmap.

At that point, I didn't know what to do.

I was caught between two opposing and irreconcilable camps of equal depth and conviction. The new and irrefutable information threw me and the whole project into a crisis. If our mission was to no longer elevate and clarify the wellness industry's core narrative, doctrine, and dogma for improving health and well-being, then what was our new destination?

I was convinced that the answer was not some middle ground between these two opposing camps, but rather something altogether different. Our team plunged on ahead.

The Real War: Leadership Engagement

After several decades of various wellness strategies—at a cost of almost a trillion dollars—the various wellness approaches failed to slow the rate of medical costs or the rise in chronic disease. And the wellness industry acknowledges the lack of progress and low rates of engagement. Its solution? To shift their narrative away from outcomes and focus on participation and strategies to improve employee engagement.

It has been said that generals always fight the last (and, therefore, the wrong) war. We could see the wellness industry was also fighting the wrong (and a losing) war—trying to change individual behavior. Repackaging, upgrading, and adding the word “holistic” doesn't change the truth or increase the chances of success.

Our research located the real war.

The real objective is not trying to solve the health cost crisis. And it is not targeting individuals through programs that poke, prod, and pay them to change behavior. The real war is leadership engagement. It is fought to win the hearts and minds of employees. That is the strategy embraced by leaders like Bob Chapman, Tom Carmazzi, Blake Irving, Josh Glynn, Greg Kunkel, Dr. Roizen and others. And, it is working.

Those leaders are taking the offense. They know that separate and isolated efforts are ineffective. Only an integration of best efforts—walking the talk, creating a healthy environment, designing healthy nudges, truly caring about their employees, and helping them to own their health and well-being—into a seamless flow of full engagement and collaboration is effective. And they see the present cultural moment as the time to cultivate health and a true sense of well-being; they fully understand the ripple effect of happier employees. The United Nation's World Health Organization came to a similar conclusion; read their report—Healthy Workplaces: A WHO Global Model for Action.⁴

Fight to Win

Business faces a health crisis that requires a multidiscipline, unified approach. Yet, most companies use only one or two weapons. They also apply programmatic and conventional tactics to a stealthy and complex enemy. I don't think most leaders have full awareness of what they are up against. I certainly did not until several months into the research. We have been lulled into adopting a containment strategy, and not a very good one. Senior leaders must engage. We cannot begin until corporate commanders step back onto the battlefield and regain real-time “situational awareness.”

I ask every senior leader I meet these questions:

• What is the percent of your full health cost to revenue?
• What is the biggest health issue your company faces?
• What have your cost trends been for the past three years?
• How much of your health costs have you shifted to employees over the past three years?

I've not yet met one leader who could answer any of those questions without calling their HR director or CFO. Guess what? They didn't know either.

Imagine you are in a battle, a fight for your business's life. Your HR forces are outnumbered and outmaneuvered. You are losing the war because costs are rising faster than profits. The quarterly health cost reports provide a number, a cost. If that cost doesn't raise your eyebrows, you go to the next report. The report offers no context, no story, and no connection to what you think drives the business. Just like the cost of the workplace is not linked to the 80% cost of employees, the cost of healthcare is simply another line item on the budget. Any number on a spreadsheet produces an immediate bias. Reduce that number. In fact, someone's bonus is probably tied to reducing those numbers.

Because it is a war of attrition, the real dangers and threats don't register.

Let's paint a different scenario. Imagine a sudden acute crisis: A cash crunch. A key supplier folds. A software crisis suddenly cripples the business. Any of those disasters would make your executive floor look like a field hospital in a war zone.

What kind of coordinated tactical response will equal the crisis?

Tom Emerick and the Cleveland Clinic's Dr. Michael Roizen have each said our nation needs something equivalent to a Marshall Plan mobilization to avoid disaster. That gives us a glimpse into the severity of the problem.

But it seems that the first and most urgent task is to change the narrative. We must have a new language and a new story.

A statement often attributed to Confucius is true and applicable here, regardless of who said it: “The beginning of wisdom is to call things by their proper names.” Only proper names permit us to enter the real rather than the illusory world.

I keep going back to the three comments I heard early in our work. These succinct pieces of wisdom order my thinking about these issues. I think of them every day:

Leaders have to care, and they can't care for people they don't know.

—Bob Chapman

It is easier to spread influence with people you know.

—Dr. Nickolas Christakis

People feel like wellness programs are done to them, not for them.

—Al Lewis

If corporate leaders read, lived, and implemented these three things every day, we could immediately impact all of America's employed citizens! Think of the effect of consistently doing those things; think of the ramifications that would ripple throughout the country.