#3.1 - Tyler Smith: Unearthing the Potential of Healthy Buildings, ESG Standards, and the Role of Innovation in Air Quality

Tyler Smith is Vice President, of Healthy Buildings at Johnson Controls.

A background in engineering he has spent 18 years with the company in roles focused on leveraging building management systems and HVAC equipment to drive outcomes in energy efficiency and indoor air quality.

From 2018 to 2020 he led the Critical Environments business unit, which designs and manufactures systems for critical spaces such as hospitals and laboratories.

From late 2020, he has led Johnson Controls’ Healthy Buildings portfolio with a focus on helping building owners operate healthier buildings through improved indoor air quality.

He brings a unique perspective on how large organisations are starting to understand healthy buildings. Not just through the lens of there customers but even internally.

Just imagine for a second you take on the role of healthy buildings at the start of a global pandemic, and your organisation has over 100k employees across 2000 buildings in six continents.

Notwithstanding the impact you can have on the perception of air quality and health internally, the impacts organisations like Johnson Controls can have at a broader level even with incremental changes is enormous and fascinating to discuss.

They have been in buildings for over 140 years, they know a thing or two about how this works, and Tyler is at the Vanguard of enterprise-level thinking in this space.

We talked about how the corporate world is starting to see air quality and health in buildings, the impact standards are having in the sector, ESG, Big Data, air quality of course and much more.

Johnson Controls - Healthy Buildings - https://www.johnsoncontrols.com/smart-buildings/healthy-buildings

Tyler Smith - VP Healthy Buildings - linkedin.com/in/tyler-smith-4934835

WELL Building Standards - https://www.wellcertified.com/

ASHRAE 421 - https://www.ashrae.org/technical-resources/bookstore/ashrae-standard-241-control-of-infectious-aerosols

WGBC - Health and productivity in the workplace - https://worldgbc.org/wp-content/uploads/2022/03/compressed_WorldGBC_Health_Wellbeing__Productivity_Full_Report_Dbl_Med_Res_Feb_2015-1.pdf

Chapters

• 0:14 Importance of Air Quality in Buildings
• 9:22 Closing the Loop
• 23:15 Money and Standards in ESG Buildings
• 41:09 OpenBlue
• 46:16 Data, Technology, and Future Opportunities

Transcript

Simon: 0:14

Welcome to Air Quality Matters, and this is a conversation with Tyler Smith. A background in engineering, he has spent 18 years with the company in roles focused on leveraging building management systems and HVAC equipment to drive outcomes such as improvements in energy efficiency and indoor air quality. From 2018 to 2020, he led Johnson Control's Critical Environments Business Unit, which designs and manufactures systems for critical spaces such as hospitals and laboratories. From late 2020, he has led Johnson Control's Healthy Buildings portfolio, with a focus on helping building owners operate healthier buildings through improved indoor air quality.

Simon: 1:06

I'm always fascinated talking to Tyler.

Simon: 1:09

He brings a unique perspective for me on how large organisations are starting to understand healthy buildings not just through the lens of their customers, but even internally.

Simon: 1:23

Just imagine for a second you take on a role of healthy buildings at the start of a global pandemic and your organisation has over 100,000 employees across 2,000 buildings in six continents. Notwithstanding the impact you can have on the perception of air quality and health internally, the impacts organisations like Johnson Control's can have with even incremental changes is enormous and fascinating to discuss. They have been in buildings for over 140 years. They know a thing or two about how this works and Tyler is at the vanguard of enterprise level thinking in this space. We talked about how the corporate world is starting to see air quality and health in buildings, the impact standards are having in the sector, esg, big data, air quality, of course, and much, much more. Thank you for taking the time to listen. This is Tyler Smith. What I was really interested to get your take on, tyler, was how enterprise level and multinational organisations are starting to get their head around this whole air quality in buildings and, indeed, healthy buildings.

Tyler: 2:51

This is a really important question, simon, and one, of course, that you may expect that I grapple a lot with in my role, and there's a lot of us out there thinking what does this post-COVID reality look like? I would say that, generally, we have COVID to thank for raising collective understanding of the role of indoor air quality, indoor environmental quality, the role that a building plays in keeping occupants safe, healthy and well. What we can't afford, though, is for the collective conscience to begin forgetting all of that and moving on to other shiny objects that are out there. From my perspective, I'm seeing that generally, not everyone has moved past. There are some out there that really, really get it, typically these large multinational corporations like mine, like Johnson Controls, that are educated well enough, they've made it a priority, they've allocated budget, they've hired staff to go focus on the occupant experience, to focus on environmental, health and safety, and they're continuing to find ways to make investments here.

Tyler: 4:07

We've also got things like standards building standards, globally, regionally that are also applying pressure. Providing incentive, maybe, is a better way to think about it for now providing incentive and we've got many that are jumping on to standards, like the well educated. I think they've recently passed five billion square feet under management, and that's huge. What we're all waiting for, though and again this is my perspective is that day when all of this great stuff that we know to be true about how you should operate buildings makes its way into codes and those that aren't incentivized just to do it because it's the right thing to do, or maybe they don't have constituents that are clamoring for it are encouraged to do so to ensure that they comply with building codes. And whether that's a quarter out, a year out, 10 years out, it remains to be seen, but I know that we're all working collectively to make sure that that reality comes sooner rather than later.

Simon: 5:11

Yeah, that's a really good point and it goes to the question of codes and the stick versus the business case, the current right I think it's so I was only talking about it on social media today from the World Green Building Council. It's an old report now but you know, if 90% of the business's costs is its people, then your bottom line is inherently linked to the health and well being, the output and the efficiency of your people. So it would be obvious to many of us that, to draw a straight line from the cost of COVID, we learn, businesses learn how much it costs to lose people for long periods of time. Do you think genuinely that businesses could lose that train of thought, that they could forget the lessons learned from COVID of how costly absenteeism and health and well being of staff actually is to the bottom line?

Tyler: 6:16

I do. You know I'm a serial optimist. I think that we're all optimistic that what we know to be true, what many of us have known to be true for many years, but that COVID really reiterated or reinforced, I think that we're seeing that some building operators have forgotten, but we're not discouraged by that. We're encouraged by the opportunity that lays ahead of us, and it's in educating, it's in creating carrots and creating sticks and working our tails off to ensure that we all remember and that we're all properly educated. And to your point, around the business case. It's also the incumbent upon us that have the data, that have this really good command on the research that's been done, the linkage between productivity and indoor environmental quality. It's incumbent upon us to really create simple compelling on ramps for building operators into that conversation. And that ROI calculation is huge, absolutely huge, contrast to the height of the pandemic, when it was a societal imperative to upgrade filters, to focus on proper ventilation, et cetera, et cetera. Today it's an option.

Tyler: 7:47

For some, it's more of an option than others, and for those for whom it is an option, they've got to create a business case for a capital investment, just like any other capital expense that's upcoming, whether that's a new building, that they need to go build, a new truck, that they've got to invest in uniforms for their people.

Tyler: 8:08

What have you? All of these capital investments are getting stacked up next to each other and they're all getting rated on their merit and we need to ensure that the ROI calculation for healthy buildings, indoor environmental quality, indoor air quality, whatever you call it investments is clear, concise, well understood, supported with data, supported with research. And then we're going to continue to win some of those CAPEX battles against these other investments and then over time, it's going to become easier and easier and then that ROI count is going to become more and more widely accepted and it is truly going to be a war of attrition now going forward, and we're convinced and super excited about the role that we can play in making that a reality, one of the key barriers for businesses and organizations at all levels have been the confusion around what measures to take, but also what measures to measure, about clarity around what good air quality is, what a good target is.

Simon: 9:22

Energy is an easier battle. In some ways it's quite numerical, black or white. You either save energy or you don't. The line between air quality and health outcomes, or the line between ventilation and air quality outcomes and productivity seems quite esoteric and difficult to grasp. But I suppose and this is where Johnson controls strengths must be is data has got to be at the center of all of that, has it?

Tyler: 9:55

Absolutely is, and I mean this is a really fun one to explore both present realities and future possibilities here. Data's king and queen. We in a typical energy project, let's say a lighting retrofit. It's very straightforward and common practice, and has been for decades to measure consumption before, estimate potential savings, perform the work and then measure actual savings afterwards. You close that loop and that business case is very cut and dry, very straightforward. So you take that in and you contrast that to something like a health outcome, not an energy savings outcome, but a health improvement outcome. Well, you should be able to do the same, right, we should be able to measure where we are.

Tyler: 10:50

Today. We've got sensors, a bunch of great sensors out there. We can set a baseline. We can, you know, plan for what we expect to be true once we improve the indoor environmental quality in a building. We can perform the work. And where we are right now and really working hard to address this final step of how do we close that loop. How then do we at the end of the day, at the end of the project, after some, maybe some period of operating time, then go back and measure, improve that?

Tyler: 11:29

What we thought was going to be true about that investment actually came true.

Tyler: 11:33

And that's where the primary contrast between what we're doing in health and wellness and productivity, healthy buildings and then what historically we've been doing in energy savings projects that's where the greatest contrast is, primarily because some of the data that we need to close that loop and prove that that calculation came true is highly sensitive data, proprietary or confidential data.

Tyler: 12:01

It's people information. It's data that building operators, big companies, especially even ours aren't comfortable or historically used to giving out, and so we're in this trust me mode right now. And then you've got the data, go check that data and you tell me whether or not you saw an improvement that we discussed that you could. But there's got to be a future in which that interaction that closing out of a project and then putting those checkpoints in place where we verify that we achieved or exceeded what we expected to achieve that that then becomes a simpler transaction, a well understood and agreed upon method to close that loop, and who knows what the role of insurance companies could be in that as well. So there's a lot of work that we as a movement here have to do to invest in making that more simple and easier to comply with.

Simon: 13:08

And I guess within an organization there's a golden circle of stakeholders between the FM people, the people that are managing the building and now, really for the first time, the HR people, the people that are managing the people and the CFO. Have got to create this circle of information that pulls the real value of healthy buildings to the fore. One of the triggers for this might be the back to work movement that's happening this. We've moved into a hybrid period of time where people have moved away from the central office space. Offices are desperate to bring people back in. Do you think there's an opportunity there to use that, to use that hunger of organizations and HR departments to bring people back, to leverage healthy buildings as a key metric?

Tyler: 14:08

Short answer yes, Ever the optimist, as I said earlier, but absolutely. You said something earlier, though, that I want to make sure I react to, and then I'd like to come back to this using a healthy building as a way to entice employees and retain employees. You use the phrase golden circle. I think that's a really interesting way to think about this. The point you're making, though, and I completely agree with, is that historically in our industry and when I say our industry, I'm thinking HVAC or building controls, things like that we're used to supporting and influencing and educating a certain we call them personas, but a certain persona within a facility. That persona tends to be a facilities manager, facilities director or a boiler room manager, just someone who has responsibility, historical responsibility for mechanical equipment in a building. That's yesterday, Today, and tomorrow is when it comes to making these indoor environmental quality and healthy buildings improvements and then actually realizing the benefits associated with them. That touches so many other decision makers and departments within that entity, that building, that FM, whomever it is that you're trying to get on board here.

Tyler: 15:41

Historically, those groups I'm sure they know who each other are. I'm sure, especially the leaders of those groups know who each other are because they sit on executive staff together somewhere, but they're not used to comfortable with interacting with each other. Their paths really haven't crossed a lot historically Until now. Until now and that's what I get super excited about is we've got this whole new world in front of us here of these decision makers, some of whom get the role that they play in these healthy buildings decisions, many of whom don't, Many of whom don't, and it is just such a world of opportunity in front of us and in front of them to help make that connection and to open their eyes to what's possible here and then to get them on board and ensuring that that business, that entity is making all of the right investments here and that they have a say in that decision, they have a seat at that table, and it's bringing together these groups, having them work on this collective opportunity, that gets me super excited about the kind of work that we lead.

Simon: 16:54

Yeah, interesting. Do you see that the split incentives nature of real estate is a barrier to that sometimes, or do you think that could also be an opportunity in some way?

Tyler: 17:10

Yeah, I think it can be an opportunity. I think, to an extent, the healthy tension is healthy, whether that's to the point that you're making around commercial real estate or it's within any company. These decision makers are coming together with different incentives, different commitments that they have made, different responsibilities, and we need that tension there to ensure that every aspect of the operation of that building has a voice at that table. At the end of the day, we want them to push through that and then rally around this healthy building's opportunity in front of them. When it comes to commercial real estate, the tension there tends to be the manager of the facility and then the tenant that is leasing or renting space from that facility. This is something that our team has explored a lot.

Tyler: 18:11

At the end of the day, who cares? Who cares enough to make a decision or influence a decision? The answer is both should. Whether you're the one that owns and operates space in a building or you're the one that leases the space and occupies it. Both parties stand to gain from a healthier building, whether it's through a more attractive facility with potentially higher lease or rent rates, retaining higher quality tenants on one side of the equation and then on the other side of the equation, you're the one that's occupying that space To your point a few minutes ago. You've got to find a way to encourage people to be in that space and leverage that and gain the benefit of collaboration and what we like to call high performance teams. All of that is going to benefit from having a space that people want to go to, that they can feel their best in, they can feel their most productive in, they're engaged, they're present, and all of that is realizable. All of that is possible through healthier buildings.

Simon: 19:23

Wonder if you'd speak to first, maybe just a little bit, on your understanding of how ESG and sustainability might be changing the conversation with your customers at the moment, and are they starting to re-evaluate what value is in an asset because of it? Then maybe we'll move on to some of the standards that I know Johnson Controls is very familiar with, around wealth, for example. First, esg and sustainability are you seeing a reaction in the marketplace to those kind of drivers?

Tyler: 20:02

Absolutely. I was talking a few minutes ago about how COVID created a societal imperative around healthier buildings, around cleaner air and buildings. Now our opportunity is to ensure that, post-covid, there's an understanding around the benefits of continuing to operate a healthier building, continuing to make these investments, and that really is the opportunity that lies ahead of teams like mine. If you contrast that, compare and contrast that against ESG and decarbonization, that is a much larger, addressable market opportunity, a societal imperative that continues today, tomorrow and then to the future. You've got some really big and bold commitments that are being made by governments, that are being made by companies, especially these large multinational companies. Then how do I follow through on those investments that these companies are going through? That's where Johnson Controls definitely plays a role in the fact that HVAC costs associated with the energy, associated with HVAC tend to make up roughly 40% of a building's operating costs. That's a big chunk. When we can identify opportunities to improve the energy consumption of that equipment, then we can make a real big impact and help these companies follow through on their commitments in a really, really big way. That's one element and that's here to stay and that's going to sustain us for decades and decades to come. The other element.

Tyler: 21:51

You mentioned the acronym ESG.

Tyler: 21:55

What I really get excited about exploring is the S.

Tyler: 21:59

In ESG, we talk E a lot, we talk G to a lesser extent and S is a really fun one to explore, especially when it comes to investing in your people through healthier buildings. This is one that Johnson Controls has talked about in the past and our ESG reports and this is one that we're seeing a really interesting. We're making a really interesting connection with our customers on as well as they try to find unique, novel, incremental ways that they can continue to make investments in ESG, that they can continue to establish themselves as leaders in ESG. Peeling apart S a bit, focusing on your people as part of that S and then focusing on the impact that a building has on those people, creates a really neat incremental way to do so. We're finding that a lot of our interactions with our customers, when we start picking at that thread in the S and ESG, we open up a world of neat conversations and new opportunities and open people's eyes to this connection, this golden circle, as you said it, that we were exploring earlier.

Simon: 23:15

Yeah, and perhaps another member of that golden circle, when we start talking about the E and the S in ESG, are the moneymen, the people that fund assets and invest in assets and divest out of assets if they don't feel they're going to retain value.

Simon: 23:35

That's something we are certainly starting to see on the ground, particularly over this side of the water in Europe, where we have things like the EU taxonomy that has really started to create a framework to how you talk about ESG and govern what it is, and certainly the next thing on the agenda is the social taxonomy, if you like, the thing that describes the framework of the social benefits of everything that we do, including buildings. So I think it's going to be a really interesting time, and often the money is well ahead of the game because it's very unsentimental about this stuff. It's just pure risk and if they're sitting on assets that they feel are going to devalue over the next 20, 30 years as we reassess what we value in assets, they'll move the money away and they'll put it into places where they think that asset value is going to increase.

Simon: 24:34

They're not silly we mentioned stand Great home markets work oh yeah for the good and bad they have incredibly short memories, they're very unsentimental and they just go where the profit is, but they're a good flag bearer sometimes for what's happening beyond the political cycles that we see and get in the way, which I think is always really interesting. And of course, one of the things that's popping up to support that broad ESG play is standards to fill that void, and certainly one of those leading the way is the world building standard, which I know Johnson Controls is now an enterprise support or partner provider. Is that right provider? That's right? Yeah, maybe explain a little bit about that because I think I think that's interesting.

Tyler: 25:31

Our partnership with the International Well Building Institute, which is the group behind the law standard, goes back a few years at this point, and their work goes back roughly a dozen years, and if you think back to that time, you had the rise of the LEED standard, the work done by the US Green Building Council and other green building councils globally. You had other, maybe regional, standards popping up, and the hypothesis at that time and it's definitely proven out over the last decade plus is that the impact that a building has on its external environment, which is covered very well by LEED and other standards, should be complemented, must be complemented by the impact, rather, that a building has on its internal environment and the occupants of that building. And that was the void that was identified by the International Well Building Institute group and then, subsequently, others like them, to create standards that govern that impact. So fast forward to March of 2020, and that took on an incredibly new and important and relevant meaning at the time because we had something to point to to say, hmm, this hypothesis our hypothesis, rather is that the indoor environments in which we're living and working and playing may have a role on the spread of this horrible pandemic that we're facing? What do we do? How do we ensure that people are safe in these buildings? And thankfully, we had some work, previous work that had been done, some standards to point to to help guide us through, especially those early days and now, more importantly than ever, into the future here.

Tyler: 27:28

So, yes, we're very proud of our partnership with IWBI.

Tyler: 27:32

We're very proud of what they've created with the Well Standard, with some other ratings that they have come out with to complement the standard, and you know, we've taken that partnership and really expanded it in a few ways.

Tyler: 27:49

One is, as you mentioned, our well enterprise provider, well EP designation, and what that means for us is it enhances our ability to consult with our customers, consult with our partners on their healthy buildings journeys that much more effectively and really work as an extension of IWBI in helping answer questions, helping with documentation, from soup to nuts, all of the work and the steps required to help a customer achieve a rating or achieve the certification. And that's something that we are, that we see as a growth opportunity for us going forward, and it really lends credibility to what we're saying and that we are. We are really walking the talk. Another way that we're walking the talk is in investing in our own facilities and we're really proud of a rating that we've achieved at our headquarters building in Milwaukee, wisconsin and the US, as well as another headquarters that we have in Shanghai and China, and we're actively exploring ways that we can expand on the work that we've done internally with our own real estate portfolio.

Simon: 29:13

That's interesting and there are a few kind of subsets of the world standard. You have the main World Version 2 standard, which is the all-encompassing air, water, food, activity, mental health. The whole works. There's a number of subsets well-performance, well-diversity and inclusion, I think it is. There's a few there Equity, that's the one. What have you done with the headquarters in Milwaukee and Shanghai? What kind of standard have you worked to with those?

Tyler: 29:48

We have, for the last two years, secured the well-held safety rating at those two facilities and that was a really purposeful decision for us because, to be honest, us, like thousands of other operators of buildings globally, were in those early days of COVID trying to figure out what to do and we were grasping for something that was relevant to the present challenges that we were facing.

Tyler: 30:20

And we were really excited that the IWBI team had worked quickly to I think in the past they've said that it was about 30 days from beginning to end they were able to create that health safety rating and that provided us and so many others like us a path to creating a healthy indoor environment and, as you may imagine, we're considering waste, as I said a minute ago, to expand on that and the relevance of other ratings that they have and certifications like V2 for our portfolio going forward. And we're very pleased with the response that we've gotten from our health safety rating from our employees A visible commitment we walk in those doors of that facility every day A visible commitment from us to them that we have invested in ensuring that that building is safe and that's something that they should want to enter into and spend eight plus hours of their day doing their job.

Simon: 31:21

And a great thing to say to your customers as well to put a flag in the ground and say, look, we're walking the walk on this subject.

Simon: 31:31

Yeah, very good indeed. If you don't mind me bringing it back to you a little bit, it must be a fascinating role as VP of healthy buildings for Johnson Controls, not only because of the footprints and the scale of the touch points you have out in industry, but I guess for both yourself and Johnson Controls. In some way there's been a transition to almost a new business model, a way of working of service provision and outcomes orientated business, from making thermostats, which was the start of it all. Perhaps start with yourself and tell me a little bit about how you ended up in this role and then love to find out a little bit more about Johnson Controls, if I may, about their kind of recent journey and transition into healthy buildings, if possible.

Tyler: 32:26

Absolutely possible. I love telling our story and talking about our journey, so I appreciate you giving me a chance to do that. I have always worked for Johnson Controls. I've just passed, I think, 18 and a half years not that I'm counting at this wonderful company and day one of a post-undergrad worker professional, I walked, as I like to say, I walked across the stage at university and then down into a cubicle at Johnson Controls in Atlanta and I spent the first half roughly half of my career in sales, and I think many of us have passed through sales at one point in our journeys, and especially those of us like you that are business owners. We're always in sales. We're always out there representing the great work that our teams do or that we know we can do and want to connect that with new customers. And that was a really foundational place for me to start spending a bulk of my 20s and early 30s in front of customers, next to customers as they make really important decisions and you use the word outcome a minute ago and, as I reflect on that first part of my career, that's really what I am so thankful that I got exposed to in those early days in selling, being in front of the customer, getting the tip of the spear is seeing the calculus that they go through to make decisions and really learning to understand and respect that process and approvals that they have to go through and those inside their own operations that they have to influence and run it up the chain and get a big decision made. There's a really critical process happening there and that happens with some outcome in mind, some expected outcome in mind. In many cases that is a financial return, a quantifiable financial return. In other cases it may be slightly adjacent to that, like energy savings, which of course is quantifiable, but slightly different conversation. And now, of course, today we're talking about one in health and wellness and productivity and healthy buildings. But getting exposed to that process, working alongside them as they went through that process, and really understanding the value of outcome based selling set a critical foundation for me in my career, and I know so many like me as well.

Tyler: 35:06

And then in 2015, I was able to kind of transition from that into my first people leadership opportunities and I gained a team and I was managing a group of sellers for a few years and then I got an expanded opportunity on top of that to go help manage some product and service portfolios that we have within our building automation business, and it was in that role when March of 2020 came and I was doing my job and we started hearing about this thing called COVID, and then I got a call, and that call was from one of our leaders saying Tyler, we're trying to figure out what we're going to do both internally and then also externally, because and I say this truthfully we had a responsibility as a big company with a large reach and a lot of subject matter expertise and a lot of products and services that were in a position ready to go to help society. We had a responsibility to find a way to make that happen. And I was very fortunate to be the one to get the call to say Tyler, we would like some help leading this effort. And, specifically, we want you and your team to go figure out this indoor air quality aspect of this, this opportunity in front of society and this challenge that that we're all facing, because, as you remember, simon, better than anyone, at that time, it was still not fully agreed upon that SARS-CoV-2 was airborne and could be transmitted through respiratory droplets, and so this connection between the air quality inside of a building and the spread of SARS-CoV-2 was a little bit tenuous and not well understood and not well respected, and so our team jumped in to try to help advance that.

Tyler: 37:12

Try to help advance that not only internally for all of the teams within Johnson Controls that had a role to play in that, but also externally for our customers. And that's really what got me going in those early days is that, man I have as a leader of this business, I have a real responsibility to leverage everything that Johnson Controls is possible of to help us get over this pandemic. And so months passed and we did some great work and we invested in some research and we formed some cool partnerships and then we officially launched our Healthy Buildings portfolio in December of 2020. And then the pandemic continued to mature and we continued to make some great strides in our understanding of how to control indoor environments, to slow the spread and then fast forward to today.

Tyler: 38:08

We're in this endemic phase of COVID. It's here to stay. And then we've got all of these other great outcomes that can be delivered to our customers. Back to that word outcome can be delivered to our customers. That can be realized by building operators when they invest in improved indoor environments, and that's what we're working on now and I'm fortunate to. I'm fortunate to be the leader of that team. I'm fortunate to work alongside a small group of incredibly dedicated and hardworking people in our group and a network of champions within Johnson Controls globally, and then, every day, all of the partners and customers that we have and helping them on their journey to realize healthier buildings.

Simon: 38:55

And I suppose it's important to give people some sense of scale here. When you say you have a responsibility, I mean Johnson Controls, if I'm not mistaken, is plus 100,000 employees, plus 25,000 vendors and direct customers and resellers. You have 2000 premises across 65 countries or so, like it's. The scale is overwhelming actually, isn't it? But the potential must be incredibly exciting, you know, because, speaking back to the impact, 90% of your costs could have on your bottom line even small improvements in awareness and indoor air quality and healthy buildings at that kind of scale has the potential to do so much good.

Tyler: 39:46

Absolutely. I love that word potential and you're exactly right and that's really what fuels us, it's what fuels the work that we do is the potential. So much of that potential lays in front of us and you're right, we're fortunate to have the backing of and the partnership with I think it's roughly 105,000 teammates globally within Johnson Controls that, in various forms and fashions, are out there helping make all of this a reality for all of the customers that we support globally, the billions of square feet of facilities that we have the pleasure of and the responsibility of helping manage. That is a true potential for us as we explore what this post-COVID world looks like, this endemic COVID world looks like and it goes back to the conversation we were having at the top of the call it's every day we wake up with a new opportunity to help educate and to help influence and to help make connections and help light bulbs go off in the brains of these customers and partners that we're working with, and that's really what gets me excited and keeps me going in my role.

Simon: 41:09

So I guess this brings us back to this challenge that one of the key barriers people have is pulling all of this information together, and I'm guessing that's where something like OpenBlue steps, in, which is Johnson Controls tool, to consolidate all of this information and present it to people in an actionable way. Would that be a good interpretation of it?

Tyler: 41:33

Yes, I think that's a really good summary of one of the main use cases for the OpenBlue suite of digital offerings, and it goes back to the conversation that we were having gosh, probably 20 or 30 minutes ago, at this point, around data, and I made the point that data is king and queen, and there's so much data that we're collecting today through sensors, and oftentimes teams like mine or people like you were thinking about indoor air quality data, temperature, relative humidity, carbon dioxide, pm, total volatile organic compounds, etc. Etc. Etc. But that's just one slice of the data that is being pulled back into or that is being measured rather, inside of a typical building, especially, or not to mention, a smart building. And so the challenge then, or the opportunity, then becomes what do you do with all that data? Not only how do you aggregate it, how do you process it, how do you display it, but, maybe most importantly, how do you extract valuable insights from the data, especially from disparate data sets, actionable insights that can then be presented to someone or acted upon in real time to make decisions on how to control or operate that building differently to achieve an outcome, and so all of that stuff is connected. From that bit of data that's measured all the way through, delivering on the outcome. And where OpenBlue comes in is in making all of that a reality and being able to aggregate those disparate data sets, being able to then slice and dice and analyze and report against all the data and then be able to extract those insights and then be able to, etc. Etc. So you know, that's what we're really excited about, what we've created with OpenBlue. We're excited about what we have worked alongside our partners to realize with OpenBlue.

Tyler: 43:49

The last thing I'll say is because this is so important as we pull in new personas into this, just like we were talking about earlier, whether it's human resources or finance or another function that is new to this game, new to this conversation, we also need to keep those personas in mind as we design the platforms and operate the platforms that they use to interact with the data.

Tyler: 44:17

So if I'm an HR person, I don't have any idea. The average HR person, rather, I don't have any idea what a building automation system is. Much less have I heard about this OpenBlue thing. But connecting what's possible with OpenBlue to commitments they have, to KPIs that they have, to responsibilities that they have, and educating on that connection, we can then help bridge that gap. We can then help them leverage what's possible through the reporting and dashboards and insights that can be gained, and so, yeah, that's a big piece of our offering and of our value proposition these days. That's a big piece of what my team and I work on, and we're really excited about what the future holds for smart digital buildings and health.

Simon: 45:12

And that's got to be the frontier at the moment is the what next question. Perhaps we're organizations that have been at this game for a long time, like Johnson Controls, in answering those what next questions and have built the infrastructure and the resellers and the experts in buildings to answer the what next question have an advantage Because, from what I've seen personally anyway, out in the marketplaces, we're getting quite good at collecting data. Now we're even getting quite good at presenting it in nice ziggy zaggy lines on screens for people to see what's going on. What we're really struggling to do is answer the what next questions and make these little white boxes that are landing on everybody's walls genuinely useful in a way that in a few years time people aren't looking around and wondering what that thing ever did on the wall. I'm guessing that's. A key part of Johnson Controls strategy is to bring to bear its operational expertise and its technical expertise to bear on this new data world.

Tyler: 46:29

Yes, you're exactly right, Simon.

Tyler: 46:32

And back to the open blue conversation.

Tyler: 46:33

That's why we've invested so heavily in that platform, because realizing the what next becomes more achievable for us as we leverage the data aggregation and the analytics and these cool things that we haven't talked about yet, like artificial intelligence and machine learning and large language models, etc. To help us then make more sense of the data. So it's in creating that base platform and enabling capabilities within that platform that then allow us to take a set of new outcomes, a new trend whatever is coming at us Unfortunately, maybe in the future, a new pandemic and act that much more quickly to then make sense of the data, act on the data, get to those actionable insights quickly to help go solve that problem in an efficient way. So you're exactly right, that's a big piece of what we do is try to stay out in front of where we think the next opportunities are to leverage data and to leverage our platform and help our customers realize outcomes that are valuable to them or maybe they don't know are valuable yet valuable yet, but will be before long.