May 3rd, 2012

The following is a full transcript of FedCentral’s interview with Naomi Leventhal, Director, Deloitte Consulting LLP and Jim Reidy, Director, Deloitte Consulting LLP conducted by Jane Norris on May 3, 2012.

Jane Norris
Welcome to FedCentral, brought to you by Deloitte; a program where executives and federal government leaders talk about the issues and initiatives that are making a real impact on the business of government today to help government help America.

So today we’re talking about telework. The Federal government has been a pioneer in telework for many years, but there are still many critics who resist implementing innovative and sustainable programs beyond government mandates. Many agencies could be missing the mark on the value of telework as a way to attract talent, boost performance, and identify cost savings that improve efficiencies across government. So how can telework help federal leaders in achieving their mission goals with fewer resources and limited budgets?

Joining us to talk about it today, Naomi Leventhal. Naomi is a Director in Deloitte Consulting’s Federal Human Capital practice. She’s currently the leader of Deloitte’s Workforce Flexibility Initiative that helps agencies design and implement new work models that focus on employee performance rather than presence in the workplace; and also Jim Reidy. Jim is a Director in Deloitte Consulting who leads the Real Estate and Location Strategy practice. His portfolio includes portfolio optimization, real estate project management, and technology enablement in both the private and public sectors. Welcome to you both. Thanks for joining us on FedCentral.

Naomi Leventhal
Thank you.

Jim Reidy
Thank you.

Jane Norris
Alright, so let me start with the Telework Enhancement Act. It was initiated in 2010 and we believe that it’s having some impact, so Naomi, why don’t you tell us how it’s going?

Naomi Leventhal
Great question. I think it is time to take a look and see where we are with the Telework Act, but let’s first think about what was required. So let me just give you one minute on what the agencies were being asked to do by the federal government, and that was to develop a policy that defines what telework is and how it will be used in a given agency. Agencies were asked to do an assessment of their employees to let them know whether they were eligible for telework. A telework managing officer was supposed to be identified, agreements written, and people were supposed to be trained in how to use the telework policy and measurements of how successful the policy was. All of those were part of the Telework Enhancement Act of 2010, and so I guess then the question is where are we today?

Well, we’re making progress. I think that it’s safe to say that a lot of Federal agencies have embraced the concept, and they have embraced also the objectives, the real goal of the Telework Act, which is to make possible for their employees a more flexible work environment, better work-life balance, and to achieve some of the many goals of telework that were intended when the act was passed. But better than that, agencies are really having success in rethinking how they do work, and so departing from the concept of telework, they’re going beyond and they’re looking at how, where, and when work is done, and Jim has been working with me to help agencies look not just at where work is done but how it is done successfully in the workplace as well as at home.

Jane Norris
And that’s part of this is just reallocating the whole idea of where you work and how you work, so that has to do with real estate, your specialty.

Jim Reidy
Yes, it’s been one of the unintended consequences of this Telework Act. We are allowing people to work from wherever they are; home, on the road, in the field. But what we’re doing is we’re leaving a lot of vacancy at the home office. You walk into any office these days that has not implemented an alternative workplace strategy or workplace of the future concept, and you’re seeing, you know, up to 40% or 50% or 60% of the work spaces empty because we’re working differently now, and that has a tremendous consequence from a financial, you know, perspective and what we’re paying for space that we’re not using, and given the pending budget cuts in the federal government next year, you’re going to come down to a choice. Are you going to pay for space you’re not using or are you going to take that money and put it back into the services and the resources you need to deliver your mission?

Naomi Leventhal
Agencies really have recognized that there’s a lot of opportunity to do good things by implementing telework, and one way to do good things is to save money, as Jim has suggested, but there’s also value in looking at what the workplace looks like once people get there. So we want people to have flexibility, mobility. We want them to be able to work at home as well as in the office or from the local coffee shop but once people get to the workplace, some of the agencies that are doing the most innovative things around the telework concept are redesigning the space that people use once they get to the workplace, and I know Jim has done some work in looking at alternative workplace design.

Jim Reidy
That’s an excellent point. We work differently, even when we’re in the office. We are working collaboratively now. We’re in meetings, we’re in team rooms. At Deloitte, we have teams that get assigned to an engagement and they will go and they’ll reserve an engagement team room for the duration of that project, and then four people who used to take up four desks now take up one office, and the way they work is incredible. We have whiteboards, we have flat screens, we can plug in our laptops, and it’s magical the way that they collaboratively work and share space and free up other space so we’re able to fit more people into a traditional office space than we used to, and we don’t even realize it. It’s something that gets adopted into the way that we go to work, and it’s – we transcend the old culture of I got to have my space. My office is my badge of rank. I’m entitled to this. As I get promoted, I go to that corner office. We’re not seeing that anymore, and we’re seeing new layout of office spaces with a lot of collaborative workspace and fewer walled offices in the interior with more open space along the outside, lower partition heights, and it’s changing the way that we use and see the office.

Jane Norris
But this is the federal government we’re talking about; very different workspace than probably any other that exists today. So how will they adopt, and does this impact their mission in order to adopt or not adopt, and also the budget pressures that you talked about?

Naomi Leventhal
Well, you know, there are a lot of cultural issues, and Jim just brought that up. There’s a lot of cultural issues that are associated with making this change, and there’s a certain amount of resistance, as well. People who have grown up with the concept of the corner office as being the goal that they aspire to may not be happy initially with this change, and people that use hoteling, which is another concept that has been brought into the federal workspace may also not be so happy with the change initially because they won’t have the same desk to report to every day, but there’s a generational change that’s happening here. People are looking for different kinds of work environments. They have different expectations. Certainly a generation that’s raised on social networking and being ever-connected and building their sense of community through social networks is not looking for the same kind of coffee pot conversation and cubicle space that other generations were working for.

Jim Reidy
I’ve seen a tremendous influence from the Millennials on the Boomers. It is changing the way that everybody’s seeing the way that they go to the office and work with one another. So initially yes, if you go from the traditional officing environment to a workplace of the future environment, the acceptance is very, very difficult, but I’m seeing a very, very quick turnaround once you start working in that environment into adopting that and then going on business as usual.

Naomi Leventhal
People are finding new ways to collaborate, they’re finding new ways to build community, and they’re finding ways to re-invigorate the culture. They’re being forced to ask themselves a lot of questions about why am I here and what am I doing and what’s the best way for me to accomplish the mission of the organization?

Jane Norris
So but the budget issue that you talked about early on in the show – that’s one that’s really going to overshadow everything the federal government plans in the future. So what have you found, Jim, in terms of cost savings that can be realized through just consolidation of real estate?

Jim Reidy
Well, we’ve done a lot of this on the commercial side of the business in the last couple years and what we’ve been finding is anywhere from a 30-60% cost reduction opportunity that can be had. So everybody says that’s a pretty broad spread. Well, the answer lies in the fact that one size does not fit all. You cannot just apply a standard set of space planning factors because every operation operates differently. Even within the same organization, you may have different divisions that have different metrics for space. So we need to take a look at how they all go to work, but the cost savings are tremendous. There’s one financial services industry that is crediting the work that we did with them for a $400 million a year cost avoidance.

Jane Norris
Wow.

Jim Reidy
We did it within Deloitte ourselves and we’ve seen something along those lines, as well. So in the assessments we’ve done for a couple of agencies within the federal government, we’re seeing a 48% reduction in real estate costs and that’s significant.

Jane Norris
So when you think about that cost savings, I mean, does that impact the decision or is telework just an idea whose time has come in the federal government, Naomi?

Naomi Leventhal
I think it’s really both. The government’s tried to do telework for many, many years. This is just the last round of initiatives in terms of trying to promote the concept, but the budget crisis really will make the difference this time, I think; the budget crisis and the younger generation that’s looking for a different model for work. Those two things together means that telework is an idea whose time has truly come.

Jane Norris
And the agencies—are they being asked to go into a measurement metric. Do they have the right tools in place in order to do that, to figure out who is eligible for telework and how far they’ve gotten into this?

Naomi Leventhal
It’s been surprisingly difficult, actually, to get good measurements because each agency will define someone who teleworks differently, and so there can be a bit of a challenge in getting that done, but it seems clear that each agency is making some amount of progress and that eventually there will be some good agreements on what the right metrics are.

Jane Norris
So is that part of the Telework Enhancement Act? Was that just deciding what the metrics were?

Naomi Leventhal
Yeah, it is, indeed. The Act requires agencies to report because the government is interested in seeing what the progress is and in promoting the concept, and if you’re going to do that, you got to measure, you got to see what success means.

Jane Norris
And so one year down the road, do you think that more agencies are teleworking? I mean, what’s the general impact been?

Naomi Leventhal
Yeah, absolutely. There’s a lot of interest in this now and in some agencies moving faster than others depending partly on the mission, as Jim mentioned. If your mission allows people to have more flexibility, then it’s more likely that you’re making more progress right now.

Jane Norris
Alright, we’ll come back in just a moment with more from our guests, Naomi Leventhal. She’s a Director in Deloitte Consulting’s Federal Human Capital practice, and Jim Reidy, a Director in Deloitte Consulting who leads the Real Estate and Location Strategy practice, talk more about telework, so stay tuned. You’re listening to FedCentral on Federal News Radio 1500 AM. I’m Jane Norris.

Welcome back to FedCentral brought to you by Deloitte. Today we’re talking about telework and some of the strategies that agencies are using to realign their telework policies and to incorporate some new real estate policies, as well, in order to save on costs that are always an issue in the federal government. Our guests, Naomi Leventhal – she’s a Director in Deloitte Consulting’s Federal Human Capital practice, and Jim Reidy – he’s a Director in Deloitte Consulting who leads the Real Estate and Location Strategy practice. So when we stopped, we were talking about measurement and performance measurement. Naomi, I’m going to ask you because the implementation of the Telework Enhancement Act of 2010 required that there be performance measurements in place, or have they been put in place and has everyone decided what they should be, and what’s the importance of them?

Naomi Leventhal
Performance measurement is so critical here. You know, one of the reasons that some agencies have resisted implementing telework programs is that managers are uncomfortable with those programs because they cannot see their employees and if the employee’s not sitting down the hallway, they have the feeling that perhaps they’re not doing the work that needs to be done. So performance measurement in terms of accountability for employees, clear methods and techniques and strategies for measurement that work is being done effectively and completely are really critical here and for agencies that have started to look at telework as an option, what they discover really quickly is that if they don’t have an effective performance measurement in place for their employees, they’re not going to be successful in implementing that program and they’re going to be at risk.

Jane Norris
So who makes those decisions?

Naomi Leventhal
They’re made throughout the organization. They really have to be made from that top down, that there’s a commitment to effective performance measurement, and then managers need to be trained in how to do this. That’s another challenge that the government hasn’t always met very well. Training needs to be done so that people understand how to work effectively in a virtual environment and managers need to be trained so that they can understand how to perform oversight and support for their staff effectively in the virtual environment.

Jane Norris
So will there be one performance metric decided for the entire government or will it be decided agency by agency?

Naomi Leventhal
Yeah, it’s got to be agency by agency. Just as one telework program and strategy won’t work for every agency, no one performance measurement strategy is going to support every agency in the same way.

Jane Norris
So how does technology figure into this, Jim?

Jim Reidy
Well, technology has now made us more mobile and whether or not we realize it, we are, you know, using our PDA’s, our Smartphone’s, our iPads, you know, to do work 24/7. I have colleagues and friends in the federal government that are, you know, tied to their Blackberry. They don’t know how to get out of it, and they’re answering emails. I’m getting emails from them at 11 o’clock, 1 o’clock in the morning, and it’s just the way we work today. So we are connected 24/7. We may not work 24/7, but we are working outside the office, and I’d like to address something that you were saying, Naomi, about the measuring, you know, work that you see. You know, the managers seeing the people working in their offices. They’re not seeing that really. They’re not recognizing that they’re not seeing it, but when you have 60% of the desks empty at any one time during the day, where are those people? They’re out in the field. They’re in meetings.

Naomi Leventhal
Yeah, that’s so true.

Jim Reidy
They travel.

Naomi Leventhal
Anyone who walks around one of those federal offices is going to see a significant amount of unused space, and it’s excess cost that’s not needing, and it’s a problem for today’s budget.

Jim Reidy
But more importantly, we’re getting the work done. The people are out there. They’re working. They’re just not being – you know, they don’t have a manager looking over their shoulder seeing them type away at their keyboard.

Jane Norris
That’s true, but there still is, at least reportedly, strong resistance on the part of managers to actually fully implement this. I mean, there was a new story just very recently that the Department of Defense is not in that camp. They want to aggressively implement telework. So is it shifting or what’s the landscape in terms of the resistance to telework?

Naomi Leventhal
It’s a journey. This is not going to happen overnight. It never was, but the signs are there and as Jim mentioned, the use of mobile technologies has increased dramatically. The government now has websites and people Twitter in the federal government. There really is an embrace of social media, and that tells you something. It tells you that people are becoming more comfortable in a virtual world and that translates into the way people work every day.

Jim Reidy
I can’t agree more, and you know, just opening your eyes to what it is you’re actually doing today will increase the speed with which telework is embraced and telework is embraced as a capability as opposed to a program. You know, sending people at home to be able to work from home, you know, one or two days a week is great, but if you’re not recognizing the fact that you’re freeing up real estate and you’re still paying for it, you’re missing half the solution or half the benefit of this.

Naomi Leventhal
And that term telework sometimes bothers me because I think it takes a very narrow view of what we’re proposing here. I think what really the government is moving to is what we sometimes call the workplace of the future which talks about how people work, not just where they work. It talks about when people work. It talks about flexibilities in the way that we create boundaries between work and not work. So there’s a lot more that’s changing, which is threatening and challenging but also at the end of the day probably likely to be very, very productive in giving us a new way of work.

Jane Norris
So what methodology can agency leaders implement in order to measure their telework programs or get other facets of the program, for instance, real estate redevelopment, started?

Jim Reidy
The first thing we have to do is change the way we look at utilization of the space. Right now, your space is utilized if it has a nameplate on it, but some of the studies that Naomi and I have worked on, we collect badging data. Who comes into the office and who’s doing work? When somebody’s not doing work, it’s going to become apparent and it falls on the manager’s shoulders to, you know, manage performance levels, so I’m not concerned about that. I’m concerned about, you know, being able to you know, accommodate the way we work today. It is completely different. We use a lot more collaborative space. The workplace of the future, Naomi, is referred to as a different look, a different feel, almost Starbuck-ish. Sorry, is that a real word? But it’s all about, you know, providing places where people can collaborate.

I’ll give you an example. At our office in Rosin, Virginia, we have nooks and crannies in the hallway that we’re using. We have whiteboards and flat screens and people gather there, and they find a place to work. They don’t need a set environment. In fact, the more walls you have, the less you get accomplished, and I think that’s the message that’s being delivered across the country in both the commercial and the federal space, and people are starting to recognize that there is a lot of value to, you know, embracing telework as a capability and the workplace of the future as an enabler.

Naomi Leventhal
And so what happens is that the space that you work in and the technology that you have to use becomes an enabler to a culture of accountability. I think that’s what we’re really looking for here. We’re looking for people to take on a greater sense of personal responsibility and accountability for meeting the mission, and so how can that be a bad thing? It’s got to help the organization. It’s kind of a win-win. If the individual is more effective in contributing to the mission if the organization is enabled through the use of these new technologies and new cultural guidelines for helping people become more effective in meeting the mission objectives, then the organization benefits from this, as well, and then if they save money on real estate, as Jim suggests, really it is a win-win.

Jim Reidy
Well, when you think about it, this is a convergence of human capital, real estate, and technology. Those are the three biggest cost lines on any operating budget and you know, people are saying well, we can’t do this ’cause it’s going to cost money. Can’t do this – but you were spending that money now. Technology, back to your original question, Jane, was you know, everybody’s saying we need to provide laptops to everybody. Well, that is a very important enabler, but a lot of government agencies are already going through or have planned technology refreshes that incorporate that. So it’s already in play, and they’ll be having these tools, and it’s just embracing how to use them to enable the way we work in the future, and that’s more collaboratively more efficiently, more economically.

Naomi Leventhal
Not to mention that we’re reducing people commuting time, reducing the energy usage associated with commuting, and one other thing that really has to be mentioned and I think it’s driving the government to adopt this concept, and that’s continuity of operations. We haven’t really touched on that. Every agency wants to be able to maintain its business and mission functions no matter what happens in the environment, whether it’s the threat of weather or terrorism or something else, and when you enable people to work from multiple locations, you enable the agency to continue its mission despite anything that might be happening in the environment, and so it’s another driver that’s an important one. It’s a benefit.

Jane Norris
And so putting in performance measurement really has to do with the output of the individual who’s working or teleworking for you. So do you think agencies have gotten that piece of the puzzle solved?

Naomi Leventhal
I think they haven’t but I think they know it’s important. I’ve seen a number of agencies start looking at their performance management systems and asking the right questions now. What are we really measuring? Are we really measuring contribution to the mission or are we measuring someone sitting in a chair? That’s, you know, the transactional approach to measurement is no longer acceptable, and a number of agencies are starting to look at how they can improve performance measurement for individuals, as well as for their own agency performance.

Jane Norris
And can agencies equate the number of people they can continue to keep employed, you know, as opposed to the real estate that they can own or have in their portfolio? Is there a direct correlation there?

Jim Reidy
Yeah, let me put it this way. For every million dollars you can save in real estate cost, and that includes leases ’cause there’s a significant amount of the federal real estate portfolio that is leased, and for every million dollars you can save, you can figure there’s, worst case, $200,000 a year per federal employee, including salaries, benefits, training, equipment, and the like. For every million dollars you save in real estate, you can keep five resources, and that’s important when you talk about law enforcement, when you talk about emergency services and the like – the things that government is there to provide for us. So it’s either pay for real estate you’re not using or continue the mission.

Jane Norris
It’s an important issue to bring up, and, Naomi, I’ll ask you. What is the future of telework?

Naomi Leventhal
Oh, I think we’re going to see a very different workplace. If you can look out to even ten years, not even 20 years, I think you’re going to see enormous flexibility, people being accountable for their work and their performance, people making choices about when, where, and how they work, a workplace that looks completely different from the cubicle farms we see today. It’s really exciting.

Jane Norris
You, Jim?

Jim Reidy
I agree totally. It’s not an either/or, it’s not a one – it’s not human capital versus real estate. It’s all blended together, and the way we work today on the commercial side is being adopted by the federal side, and it really changes the whole environment. It makes it a place you want to go.

Jane Norris
Interesting. Thank you so much, both of you, for joining us to talk about telework and the future of telework today. You’ve been listening to FedCentral on Federal News Radio 1500 AM. My guests, Naomi Leventhal – she’s a director at Deloitte Consulting’s federal human capital practice, and Jim Reidy is a director in Deloitte Consulting who leads the real estate and location strategy practice. Please join us again on FedCentral here on Federal News Radio 1500 AM. I’m Jane Norris.

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