Is It Personal?

A group of Washington, DC, policymakers gathered in a sumptuous hotel meeting room to discuss the need for empathy in public policy. One of the presenters, a Hispanic community organizer, began to speak earnestly. In Spanish. The policy wonks looked at the event coordinator. What was going on? He spoke for four or five minutes. No interpreter. Then, he stopped, looked at the confused crowd and said softly, “Now, you know what first grade was like for me. I wet my pants the first day because I couldn't tell the teacher I had to go to the bathroom.” He spoke another 20 minutes to a completely captivated audience.

Sometimes those sitting around the boardroom don't buy in because they sense the issue is not personal to the presenter. Until this project, I cared about health, joy, and engagement. But my care was too cerebral and detached. Then, I walked through an extended series of familial and friendship crises. I even had to face a serious disconnect between our oldest son and me. My type “A” approach to life clashed with his highly relational wiring. I never intended it, but my message was clear: “You're not meeting my expectations.” It eventually blew up in my face, and it took that for me to reach out for help. I had to start with me; I slowly became the kind of dad who was, first, a safe place. My son had to know that I cared. No conditions, expectations, or performance clauses. It's been a long road. But, as we recently concluded a phone call, I said, as I often have, “I love you, son.” And he said what he never says: “I love you too, Dad.” What is the ROI on that?

If you get hired at Next Jump, you are hired for life. The company has walked an extraordinary journey to help people bring their whole selves to work. Simon Sinek has helped them on that journey. His oft-stated wisdom has helped Next Jump to build a culture of care and commitment: “A company is a modern-day tribe. Hiring someone for your company is akin to having a child. If you have hard times in your family, would you ever consider laying off one of your children?”

Sinek carries a classic load of wisdom: It's not business; it's personal. How did we ever forget that life—all of it—is personal? Barry-Wehmiller's CEO Bob Chapman asks one question about employee policies: “Is it the right thing to do?” If it is, he expects leadership to find a way to make it work for the company.

Here is the crossroad we face. Can we stop taking the road of least resistance? Can we turn away from mere efficiency, short-term outlooks, and spreadsheet thinking? At one time, safety was a trade-off with cost. Then Alcoa made it a catalyst for transforming their business. Sustainability was always a trade-off with cost. But Interface Carpet made it a catalyst for transforming their business. Once upon a time, General Electric was famous for firing the bottom 10% of their employees. Next Jump has made lifetime employment a commitment device to force it to become a better company.

Are We Smart or Healthy?

Maybe we're too busy and myopic to see and feel the need. But it seems that our momentum drives us to become efficient (smart) instead of healthy. Spreadsheets have become the fast food for decision making (just as PowerPoint has become the fast food of presentations). They are convenient and inexpensive, but they strip out all the nutrients necessary to make healthy human decisions.

I once sat in on a national contractor's quarterly senior leadership meeting. Reports appeared around the table for each participant. Each report included brief summaries, dashboards of key performance indicators, and pages with spreadsheet back-ups. Most of the meeting considered revenue projections and project updates. When the meeting turned to the safety report, we all saw that incidences for the past two months had increased. That generated a lively debate of suggestions on how to fix the numbers. No one saw that the numbers were abstractions for the real people who suffered real harm, loss of income, potential loss of future employment, and a ripple effect through their families. No one in the meeting acted from bad intent. The meeting simply followed the matrix for how we arrive at smart but unhealthy decisions. And, true to that pattern, that company decided to resend its safety protocols, add another safety audit, and put more pressure on supervisors.

I later wondered how the meeting might have unfolded differently if a large picture of each injured employee and his or her family had been posted along the boardroom walls before the meeting. What if the numbers had been turned into stories? What if each executive had selected one of those injured employees for a personal and unhurried conversation? Could a culture grow up around learning, caring, and communicating why the company values safety?

At one point, I raised a question of safety's value to the company. And, to their credit, my question did generate a follow-up conversation. Together, with one executive, we worked to create a Team Health process and dashboard designed around crucial measurements.¹

The Power of a Meme

Another reason that organizational health is so elusive may be that leaders simply don't believe the numbers. I understand—I don't believe them either. Let's face it: one reason we don't have sufficient buy-in is that the wellness industry, the whole narrative, suffers a lack of credibility.

Most wellness experts are not numbers people. They throw out statistics with little context or documentation. And that is how memes are born.

For example, many people in the wellness world have heard and believed that each dollar invested in wellness programs will produce a three-dollar return. But that's not true. Doesn't matter—that calculation is entrenched. In fact, if you type “$1 of wellness equals $3 ROI” into Google's search engine, you will get about 276,000 results. Scroll down; you will see those numbers repeated by SHRM, the Chicago Tribune, the American Institute of Preventative Medicine, OSHA, and others. The references roll for many pages.

That is where the great ROI debate began for me. I tried, diligently and unsuccessfully, to track down the source of that “$1 = $3” fiction. What was measured? Retention, engagement, lower health costs? How was it evaluated? Was a baseline established, a defined period of comparison, a control group? Who did the measurement? Was it human resources, an outside firm, the health vendor?

That “$1 = $3” is the most resilient meme surrounding wellness.

The word meme has acquired great (and recent) cultural currency and is rooted in the Greek word meaning “imitated.” As such, the word describes the great expansion of phrases, videos, quotes, and other units of information that explode through that uniquely suitable carrier that we know as the Internet. James Gleick explained that dynamic very well:

Memes emerge in brains and travel outward, establishing beachheads on paper and celluloid and silicon and anywhere else information can go. They are not to be thought of as elementary particles but as organisms. The number three is not a meme; nor is the color blue, nor any simple thought, any more than a single nucleotide can be a gene. Memes are complex units, distinct and memorable—units with staying power.²

Scientist Richard Dawkins coined the word in his book The Selfish Gene.³ His further explanation, now in the Merriam-Webster Dictionary, tells us: “Memes (discrete units of knowledge, gossip, jokes and so on) are to culture what genes are to life. Just as biological evolution is driven by the survival of the fittest genes in the gene pool, cultural evolution may be driven by the most successful memes.”⁴

That's how “$1 = $3” has survived for decades. And a leader, or an audience, with no intellectual investment or emotional buy-in will simply confirm their biases. The meme becomes a Rorschach test, not a useful decision device.

So, What Are We Missing?

David Radcliffe, Google's vice president of real estate and workplace services, presented a question to one of our summits: “Are we squeezing pennies of support on the top and losing dollars of engagement on the bottom?” Great question.

We know that 82% of a company's costs is salaries and benefits (69% salary, 31% benefits)⁵ and remains below the surface, out of sight. The tip of the iceberg is made up of design, construction, furniture, and equipment costs of 5%. You add operating costs of 3% and technology at 10% for a total of 18%. So, in summary, here is the iceberg of costs:

If I live on the tip of the iceberg, my responsibility follows a simple logic: Shrink my cost. I become a hero by shaving 25% off $20, thereby completing a task at $15. If instead I spend $25 and explain that I did it to improve productivity, I simply went over budget. There are no systems in place to ask, plan, or measure if squeezing pennies loses dollars of engagement or spending pennies adds dollars.

Kate Lister raises this question by looking at two snapshots of a $70,000-per-year financial sector employee. She first looks at the cost—about $6,000 for an office and $8,000 for technology, for a total of $14,000 per year—to support this employee. The second snapshot looks at his or her contribution to corporate financial health. Each employee averages generating revenue of $420,000 a year, or $210 per hour, six times his or her salary!

Lister writes:

Here is the reality that most fail to consider in their myopic pursuit of lowering costs: if an employee loses just six minutes of productivity a day because of their office environment, i.e., problems with technology, poor ergonomics, bad lighting, etc., it entirely negates the hoped savings from eliminating their office. Eliminating office space may be tangible, but if unintended consequences make it harder for employees to do their work, the loss of productivity can completely negate the real estate savings.⁶

Companies like Apple, Facebook, and Google understand the true economy of talent. They fiercely compete in the talent wars. Their employees also generate an average of approximately $1.2 million of profit per year. Each employee. $1,200,000 of profit. Of course, those companies are disciplined and effective in their management. However, they use a different lens for viewing the value of human capital. They see it as an asset to leverage, not a cost to contain.

In other words, could a 10% increase to enhance an office, just $700 per employee, result in just a 1% increase in productivity? If so, that would generate a 700% ROI.

Conversely, could a 10% “savings” result in a 1% loss of engagement and productivity? It only takes 20 hours lost (due to disruption, distraction, or disengagement) to drop 1% of productivity. That is one reason office moves or a new program implementation can become so costly. An hour of planning can prevent a loss of many hours in productivity due to poor coordination and resistance. Implementations that “go off the rails” can take weeks and months to work through. And they often leave a residual drain or stain on the organization.

Flipping the Argument

Are we playing defense when we could and should be playing offense? If so, that could be because people are often more comfortable defending something that doesn't work but that taps their personal sweet spot than to adopt something new that rode in from an unknown territory.

The first book we produced, The Commercial Real Estate Revolution,⁷ tackled the dysfunctional process and culture for designing and constructing buildings. I was still learning to deal with gritty and skeptical subtrades and contractors who have survived by doing things a certain way. But one of our coauthors, Bill Black, grew up as a tradesman in Scotland, as well as a quantity surveyor. While I had research on my side, he also had years of hard-fought experience.

We addressed an event with general contractors, promoting integrated project delivery. That was part of our answer to flip the broken system. We argued that the stakeholders, brought in early and using a collaborative stakeholder framework, will perform much better than gathering everyone after all the major decisions have been made. The latter is a shotgun wedding. I told that meeting that such a marriage won't work. It is built on distrust. Owners won't support it. Others have tried and failed.

Even though no one took issue with our description of the then-current state of construction, it took a completely different mindset to consider a trust-based system.⁸ But, when they asked for proof, I shared some anecdotes and found myself consistently playing defense. Bill, on the other hand, relished the brawl. He responded in a very cheeky tone, “So you're telling me that you'd prefer a late project, over budget, bogged down in claims with an unhappy client? Take a moment and defend that for me!”

The evidence for improving engagement and performance is deep and compelling, with one flaw. It does not fit the paradigm and falls outside the domains of real estate, operations, and procurement.

The tagline for an old Fram Oil Filters commercial gave a perfect summation of these processes: “Pay me now or pay me later.” That is the problem that Dr. Roizen has with the RAND report. He says that Mattke is right: most wellness programs don't work. But that is because they are poorly designed and administered, they measure participation instead of outcomes, and they don't have meaningful incentives.

Kate Lister reports that only 17% of companies spend more than $150 per employee for wellness efforts.⁹ The Cleveland Clinic provides incentives with a no deductible plan and caps out-of-pocket family costs to $3,000.¹⁰ They have also reduced their average annual cost increase of 8% (the national average) to zero!

Maybe some leaders need to pay attention to the Cleveland Clinic.

The Strongest ROI: A Healthy Building

As you've probably gathered by now, investing in a healthy building is the most direct strategy for improving employee health and well-being. Because the immediate space that surround us affects every system in our bodies, Dr. Whitney Gray sees buildings as one of the most effective delivery devices for passive positive medical benefits. Those benefits are supported by exhaustive documentation of that impact on our systems.

In the fragmented system of budget buckets, the cost for upgrading a building comes out of either the capital or the maintenance budget. And that always evokes that standard objection: “This is going to be a tough sell.” Assuming the organization is stuck in that logic, and either doesn't fully buy the business benefit of healthier employees or has no means of measuring it, I would (and do) compare a healthier building strategy to the cost and return of a wellness program strategy. Tom Emerick says the oft-stated annual cost of wellness programs at $700 per employee is just the vendor and rebate costs. He said, “That's not even half of the true costs.” I asked why I've never heard that math at wellness conferences. He smiled.

Let's use Kate's example to build a scenario. And, despite Tom's adjustment, we'll use the average annual employee costs of $700. So, 100 employees will burn $70,000 in a year. Furthermore, only 15% of those employees will participate, most likely the healthy ones. If only 15 of 100 participate at a cost of $70,000, the cost of running that program is actually $4,700 for each! Obviously, the ROI for buildings just crashed.

We must have that essential conversation.

Let's use Tom Emerick's annual cost-per-employee of wellness programs, as shown in Table 11.1. A complete picture of wellness program costs must include the internal administration cost for running the program and the lost productivity of employee participation. You will need your company's actual monthly time investment per employee, on average. To get a true picture, use the lost revenue generation per employee, not salary and benefits.

Now, if the average employee turnover rate is 15%, whatever benefits an employee may have gained by his or her participation goes with that employee to the next company. But, improvements to the building and designed nudges remain and have a positive effect on whoever works in that space.

That should not be a “tough sell!” If it is, it is only because of budget and turf silos. We have seen that there is almost always enough money spread among different buckets to address employee health, well-being, safety, service, etc. By coordinating resources, most companies would find that shifting dollars to a healthy environment creates an attractive and more effective strategy.

The estimated cost for upgrading a building to the WELL Building Standard, GSA's FitWel, or LEED v4 runs somewhere between $150 and $500 per employee. And that is a one-time cost. Paul Scialla elaborates, “That's the hard cost, the soft cost, the consultancy, the certification, all included, for what? For a constant and primarily passive delivery of prevention to enhance cardiovascular health, respiratory health, immune health, cognitive health, sleep health outcomes.

The foundation of enduring support for health and wellness investment is traditional due diligence analysis…Fortunately, such analysis is possible and often highly favorable. For example, returns of nearly 300% are possible, with limited risk, from healthy building investments and assume only a 0.5% increase in productivity.¹¹

—Scott Muldavin

“Here's the best part: guaranteed 100% participation.” And then Paul asked the key question:

What if there was a way to impact and introduce prevention into society in a manner that did not necessarily require behavioral change? What if there was a way to impact cardiovascular outcomes, asthma-related illnesses, respiratory outcomes, sleep outcomes, immune outcomes, in a manner that didn't require people to do something different, at least in the beginning? What's the best vehicle to deliver that prevention in a passive manner? Well, how about the real estate where we spend 90% of our time? Our homes, our offices, our schools, and other built environments can be used as a healthcare intervention tool, at $1 a square foot.

That is exciting.