Hanna Hasl-Kelchner:        [00:00:00] How do you reevaluate the value of your office workplace post-COVID when the world for office workers has changed dramatically and working remotely has become a common place.

 

When we come back, my next guest is a real estate expert with some thoughts about how to reimagine the workplace for the future. Oh wait, the future is now. Stay tuned.

 

Announcer:   [00:00:22] [Music] This is Business Confidential Now with Hanna Hasl-Kelchner, helping you see business issues hiding in plain view that matter to your bottom line.

 

Hanna:         [00:00:34] Welcome to Business Confidential. I’m your host, Hanna Hasl-Kelchner, and today’s special guest is Mr. Chris Kane. Chris is a real estate professional with more than 30 years of experience, having been Vice President of International Corporate Real Estate for Walt Disney Company before acting as head of Corporate Real Estate for the BBC.

 

Chris is also the author of Where is my Office?: Reimagining the Workplace for the 21st Century, which I’m looking forward to hearing more about. Welcome to Business Confidential Now, Chris.

 

Chris Kane:   [00:01:08] And – Hanna, thanks for having me on. I’m looking forward to an interesting chat.

 

THE UTILITY OF THE OFFICE WORKPLACE POST-COVID

 

Hanna:         [00:01:12] Yes, me too. You know, there’s something about “the office,” and when someone uses that phrase, it conjures up all kinds of images. [Laughter]

 

Assigned desks behind rows of closed doors or cubicles, or maybe even in an open floor plan, but always desks. And since COVID forced many office workers to be productive from a different location, where does that leave people in terms of this vast amount of office space? And I don’t mean in terms what is the rental value, but the utility of – of it and its role in the future of the workplace.

 

Chris: [00:01:49] That’s a great question and I need to break it down a little bit. In writing the book, which I finished pre-COVID, the title “Where is my Office?” was designed to address that because I think businesses, both large and small, have been, you know, dealing with a hell of a lot of change over the last 20 years. And when COVID came along, it really not only changed the game, but the entire stadium.

 

And, you know, if you look at the office, you know, you talk about corporate America and large open plan like the space with tubes and all that side of things, you know, they were designed as basically, the successors of the production line of factories. As we all know, work and the nature of work ha–has been – been changing and the real estate industry has never had to face up to the realities that its customers were facing this change until along came COVID. And, you know, we had this enforced work from home.

 

Basically, it was like massive experiment where industry and businesses, right across the globe, all had to send their folks home to, you know, figure out ways of doing it if they couldn’t beforehand. And what’s happened is that the workforces, not only in United States, but in Europe and in the far East, have recognized that they can do their work very differently.

 

[00:03:16] Now that is going to cause a dilemma for many businesses and the managers of the work teams in those businesses, and indeed for the real estate industry, and indeed for the city. So, it’s – it’s a perfect storm, and when we are trying to figure this out and once everybody is talking about “Oh, I need to get back to the office,” there are some really big existential and systemic questions that are being asked now. Questions that we’ve never have to ask ourselves before like, “Why would I get on the highway and commute for an hour or two one way to fit in a big office in the CBD, or in an office park just to send emails.” So, we’re living in some really strange times, which I believe, called upon not only business owners, but real estate folk and city planners, and policymakers to sit down and reimagine what this thing we call office work really should look like in the third decade of the 21^st century.

 

Hanna:         [00:04:22] You’ve covered a lot of ground there, Chris. [Laughter]

 

Chris: [00:04:27] [Laughter] Yes. Well, I see, it’s a big topic and I mean, for – in writing the book, I never, for one moment, realized it would become such a topical arena because most folks, whether they are a business leader or an office worker, or anybody else for that matter, you know, just walked around, you know, Atlanta or Manhattan, or Downtown San Francisco, or even Tulsa, Oklahoma, saw all these big glass boxes, nobody ever thought about them because that’s what we’ve always done. We’ve always done it since Frederick Taylor invented the first office in Chicago in 1908 or whatever it was.

 

HOW TECHNOLOGY CHANGED THE OFFICE WORKPLACE

 

And, you know, we’ve been going for over a hundred years doing the same thing: going to an office to sit at the desk and do stuff. And, you know, it worked. People get – had great careers out of it, et cetera, et cetera, but things started to change with the arrival of technology, particularly cloud computing. So, you know, when – when the iPhone and the Android started appearing in, what, 2005, 6, that – and cloud computing came along as well, people realized that the – the – what I call the umbilical cord between the office worker and their desk, you know, you cast your mind back to the old times when everybody had a monitor, everybody has desks, phone, or Rolodex.

 

[00:05:55] Some of us might even remember when we had typewriters, but we won’t go there. [Laughter] And, you know, that connection was cut then because you could move around the office, and then, you know, people started to look at those telecommuting and remote working, and all of that. And what’s happened, I think, over the last 18 months, like, you know, there’s been a lot of pain and suffering in the United States, in Europe, and right across the world, but in parallel with that, forcing people not to have to go downtown or into office parks, has given them a different perspective on how to work. And, you know, some CFOs are saying, “Maybe I can reduce my real estate footprint.” This is not about real estate. This is about people and organizations, and how we want to work going forward. And that means, that leaders have got a challenge, but I think not only ha– is it the challenge, but I think we’re going to find lots of smart thinking and innovation coming out of this, out of this dreadful period we’re currently existing within.

 

THE KEY QUESTION TO ASK ABOUT THE ROLE OF A PHYSICAL OFFICE WORKPLACE POST-COVID

 

Hanna:         [00:06:59]     Interesting. I totally see your point about this is isn’t about the real estate, but the value of being in the same physical space. And so, what questions do you think executives, business owners, people who have office space for their business need to be asking themselves about the role of the physical workspace in promoting the creativity, the teamwork, the productivity that they need to keep their business moving forward?

 

Chris: [00:07:31]     Yeah, great question. I think the defining factor for any business, be it large or small, or mid-sized for the next foreseeable future is to be seen as an employer of choice, and that means the smart executives and the smart managers will be saying to themselves, “Where and how do my staff do their best work?” And, you know, I mean, if you look at all the debates, you know, the New York Times, the Wall Street Journal, all of the newspapers, all of the television programs, they’re all talking about the either/or, either the death of the office and the work from home, and all of that.

 

FACTORS TO CONSIDER IN EVALUATING THE OFFICE WORKPLACE POST-COVID

 

And it’s just not that simple. I – I don’t think American workers who work in offices can work permanently, at scale, from home. Some can, and I think we – you’ve probably seen the birth of a new label called hybrid working. And you’ve seen a lot of press commentary about people are coming back to the office, say, for three days a week and working from home for two days a week.

 

And I think that’s just one of a number of options, but it’s really about that fundamental question is, for an organization, “Where am I in my lifecycle? Am I a start-up? Am I growing? Am I maturing? What sort of nature of my workforce is it and where are they best placed to do their best work?” And for some people, not everybody, that might be working from home for all of the time, for some of the – the time. You know, this is – where – what we’re seeing is a massive shift from the 20th century standardized, homogenized approach to work, to a much more customized – a patchwork quilt, if you will. You may recall years ago, people had patchwork quilts in their home made by their favorite aunt and it’s going to be a variety of things dependent upon the company.

 

[00:09:42] You know, finance companies will have certain constraints. You’ve seen all the debates over the Wall Street titans demanding that their workforces go back the office en masse. You’ve seen, you know, in the technology world, what the -how Apple’s staff reacted to Tim Cook’s similar request. You’re seeing lots of people moving around the country.

 

There’s a whole raft of variables in play like never before. So, I would urge leaders to basically don’t accept what is, you know what I mean, instead of just deliver it as saying, “This the way you want to do this.”

 

I think once you’ve figured out where your staff do their best work, and it might be in a number of locations over a number of time settings, then you say to yourself, well how can I best support them to do that? There will, inevitably, be, I think, the birth of a blended physical and virtual working system in the next five to 10 years, and it might come even faster than that. And that’s scary for organizations, particularly the bigger ones who are set-up, you know, in a very bureaucratic way. And that will be a challenge because the talent – and this is what it’s all gone to, we’ve heard about wars for talent in the past.

 

HOW OFFICE WORKPLACE POST-COVID IMPACTS THE WAR FOR TALENT

 

We ain’t seen anything like the war for talent that’s going to emerge in the next two or three years because it’s no longer just about pay and reward. It’s about personal preferences and where individuals choose to work. So, what’s been happening in consumer products and in travel is happening to the world of office work and real estate. That choice is now here front and center, and people are going to demand choice and they’re not going to accept second best. And that’s going to be difficult for some managers and leaders to get their heads around.

 

Hanna:         [00:11:47]     Oh, definitely. Some heads are going to just explode. Just boom. Ye- I – I can picture it already because that’s the way they’ve always done it; they expect it to continue that way and their creativity isn’t being stretched. They don’t want to stretch it. They just want to go back to the way it was because that was simple, they understood it, that’s the way they did it, so you’re right. It’s – there’s going to be a tremendous leadership challenge. I’m curious if you think there is anything in the configuration of office space that would help that transition or facilitate that transition?

 

Chris: Sure.

 

Hanna:         Compared to what we’ve had before. I mean, is there a way to make the physical space more inviting? And I don’t mean more jellybeans in the breakroom.

 

Chris: [00:12:35]     Aw, shucks…

 

Hanna:         [00:12:36]     But in terms – [Laughter] that’s where you were headed right?

 

Chris: Yeah, its…

 

NITTY-GRITTY OF REIMAGINING THE OFFICE WORKPLACE POST-COVID

 

Hanna:         But, I mean, you know, you talk about reimagining the office. So, what about the office itself?

 

Chris: [00:12:49] Well, the office itself has been a very lucrative form of investment for the real estate world because, effectively, all their letting is four walls and a roof, dry space. And for businesses to make these downtown offices and business parks, you know, moreover attractive for the workers to consider coming back to them and to make them safe as well because, you know, COVID and all these pandemic risks are not going to disappear – disappear completely anytime soon. And so, there’s that risk element you need to consider.

 

So, I think the smarter property companies, the landlords are going to say we need to shift our game. That’s what I meant when, you know, COVID has not only changed the game, but the entire stadium that’s – the way real estate is developed, financed, provided, and leased. Like, take for example, I’m sure, on your office, you have a lease and if you look at the parties for that lease, one is the landlord and one is the tenant. And those terms are, you know, are medieval in nature. They’re older that the United States, if you think about It that way.

 

And – but it also implies an attitude and I describe it as the real estate industry is more interested in servitude rather than service. And you know, why – why wouldn’t they because they’ve got a commodity, which people needed. You had to be, if you were, say, in the marketing and advertising, you historically used to need – needed to be in Madison Avenue.

 

[00:14:28] Or if you were in media, you had to be in the west coast, in – in Los Angeles, et cetera, et cetera.  That doesn’t work anymore. So, the whole nature of space has been redefined as a consequence of COVID because workers can be – become much more footloose than ever before. Businesses are realizing this.

 

Businesses are realizing that maybe they have a bit too much of a real estate footprint. So, the savvy real estate property world have got to sharpen their axe and say, “How can we make our space more attractive to retain our existing tenants?” And maybe – maybe do a new deal, maybe a bit like – I mean, I would liken this period, not only, I think to the medieval great plague in Europe when that gave rise to huge change, in particular, the disappearance of the feudal system. Maybe we’ll see some massive societal and attitudinal changes for the better.

 

God knows, I think everybody can think of things that we can make – have a better life in terms of our society, no matter where we live. And, you know, I mean, that we’ll move to a much more, I call it the age of human, where we care about our fellow human beings and we think about what a mess we’re making of the planet, both in terms of climate and biodiversity, and how we really got to do things better. And one of the biggest manifestations of that is the real estate industry and how it needs to shape up.

 

MAKING WORKPLACES MORE FIT FOR 21^ST CENTURY WORKERS

Hanna:         [00:16:04]     Interesting. Yeah, you mentioned earlier that you had written your book, “Where’s my Office?: Reimaging the Workplace for the 21st Century,” before COVID.

 

Chris: Yeah. And…

 

Hanna:         And what inspired you to do that?

 

Chris: [00:16:16]     Call it the luck of the Irish, I don’t know that – I had – having left the BBC a few years back, it was a job of a lifetime, and I thought I landed the job of a lifetime, beforehand, when I got the chance to work with the Walt Disney Company, but the two sets of experiences gave me, a guy from a small town in Ireland, some unique experiences. And then a friend of mine urged me to say “You’ve got to write this stuff down and you’ve got to write down what you’ve been talking about,” which was about making workplaces more fit for purpose for workers in the 21st century.

 

Paying attention to this whole issue of climate change and, I mean, just making smarter use of things, and I mean, stop accepting that this is the way we’ve always done it type of mind set. And I suppose I got that appetite when I worked in Disney on the West Coast, but, I mean, that Imagineering spirit and what a better label than just reimagining things.

 

And, of course, the whole COVID experience, you know, forced people to do things that they never thought possible. Like, you know what I mean, you – you listen – listen to your – your recent guest, you know what I mean, Hannah (Genton), about autonomous lawyers. Who would have thought lawyers and attorneys could work in such a manner? But they’re doing it.

 

Over the last 14, 18 months have you seen one thing which people haven’t talked about is the disappearance of paper. We’re now becoming much more accustomed to dealing with things on the screen, and things which were thought highly, highly unlikely have happened. So, all this says to me is that we’re in a period of reimagination, of reinventing.

 

[00:18:10] I – I don’t think that the view of many, say, the traditional managers that they can just, in after Labor Day, hit the reset button, and everything goes back to January 2020. It’s simply not going to happen. And I’m speaking to people right across the world, and – let me give you an example.

 

Where I am in London, I mean, the sun rises in the East and Australia has been the first to basically come out of this dreadful pandemic, and they’re saying to me, “Yeah, we’re really 90% back to normal.” What they’re finding is that they thought they had a war for talent pre-COVID. They are now experiencing it like never before, particularly in professional services where their potential employees and some who are on their – on the books already are saying, “We want a new deal. We want more flexibility and we’re willing to, you know what I mean – pay is a secondary consideration.”

 

So, if that’s happening, that’s got to be some really big, big challenges. You know, you look at the US workforce figures and the results for vacancies, and stuff. You know, I mean, it’s a – there’s a very interesting dynamic playing out right in front of our eyes at the moment, and I see it as a challenge, but also as an opportunity. You know, looking back in history, I think we’re about to start a period of what I would call the 21st Century Renaissance where a lot of stuff is going to be reimagined in a 21st century manner, rather than trying to apply 20th century parameters, and mindsets and policies. They were from the analog age. We are now truly at the digital age.

 

THE COMMERCIAL REAL ESTATE INDUSTRY’S DIRTY SECRET

 

Hanna:         [00:19:55]     Well, that’s exciting. I – I like that idea of reimagining and a technological new renaissance that has so much potential and so much creativity as a promise. But what would you say is the biggest take away from your book that you’d like one of your readers to have?

 

Chris: [00:20:15]     I guess one of the things that really annoyed me was that many consumers of commercial real estate, in particular, don’t understand and have never had the opportunity to understand how the real estate system works. It’s been deliberately made to be opaque and the old adage “to be forewarned is to be forearmed,” you know, that we have a leasing system, which many people find is adversarial. I believe the system can be best summed up as it’s costly, it’s confrontational, and it’s convoluted, and, you know, referenced by earlier point about landlord and tenant.

 

So, can we have a better, more seamless system?

 

And only by equipping the consumers to giving them the insight to say, “You know what folks? You have a choice where you buy your car or you lease your car, you can, I mean, you’ve got a whole raft of things. Now, you can get on demand or subscribe for rather than having to buy.” Maybe it’s time I thought about my real estate holdings, in a similar vein, and ask my – my provider to give me a range of options, with the associated flexibility.

 

And, you know, I’m happy to pay for that as well, but, you know, to give us a better system, because at the moment, consumers can only either buy a building or lease building. And if you’ve ever gone down that route, you’ve got to get a broker. You’ve got to get a lawyer. You’ve got to get due diligence.

 

[00:21:45] You’ve got to fit out and that’s all on top of doing your day-to-day business. And what I wanted to do in the book was just basically talk about the emperor’s new clothes, and show the consumers what’s going on there and asking them to say, “Well, what do you want to do about it?” And then, along came COVID and the ball is very much in the – in – with the consumer now like never before.

 

Like take for example in Britain, supply, or demand has always exceeded supply for decades. There was never enough commercial real estate, until now. And it’s quite interesting to watch the market dynamics here in the last couple of weeks on – on how that’s playing out, and many major consumers are exercising this newfound ability to have choice, which is something that, you know, when we’ve all been getting accustomed to over the last 20 years, as we – we’ve been given more options in terms of how we buy vacations, how we buy cars, how we buy consumables. How we consume content, you know, that choice has exploded. Maybe it’s time the real estate industry provided more choice and better service.

 

DITCHING THE “TAKE IT OR LEAVE IT” LANDLORD OPTIONS

Hanna:         [00:23:00]     So, since you say most consumers are still of the old mindset because this is the way it’s always been done, help them think outside the box. What – what kinds of things could they ask for? They may not even know to ask for it, Chris.

 

Chris: [00:23:14]     Well, yeah, and this is – you know what I mean, the classic is, “Oh, can I get flexibility on my lease contract?” But you know what I mean, this goes back to one of the core questions of where will they – they, the workforce, do their best work.

 

And I think it’s going to be in a permutation of options, and this will depend very much on the nature of the business. Like, some people can be completely autonomous, like – like GCL or GET Lab, or Autonomous, or another example of American companies which are totally virtual, but that doesn’t work for mainstream corporate America.

 

So, there’s always going to be some sort of mix and you can go down a hybrid route, or you could go and, you know what I mean, maybe have a mix of a core office and a spoke office, and maybe some local – localized hubs as well.

 

But why not ask a property company to say, “Look can you give me a package of solutions?” Rather than saying here’s my building, here’s the floor, here’s the lease, take it or leave it. Why doesn’t the system say, “Well, okay Mister Acme Cleaning Company for North Carolina, I need X thousand square feet, but I want a bit in downtown. I want a bit in the suburbs and I want some local work hubs that my people can use a car to check in on as a – as a serviced office option, and to have it all provided by one organization, and they cost one invoice and get paid by one check.”

 

That’s one of the variety of options. But this is – yes, so it’s just about having a better dialogue, I guess, rather than one of take it or leave it.

 

DON’T BE AFRAID TO ASK FOR YOUR IDEAL OFFICE WORKPLACE POST-COVID

 

Hanna:         [00:25:03]     So what I’m hearing is don’t be afraid to ask.

 

Chris: [00:25:07]     Well, it’s the old saying, you know, we’ve all – “But if you don’t ask, you don’t get.”

 

Hanna:         [00:25:11]     [Laughter] Well, hopefully they don’t laugh you out of their office. [Laughter] But its…

 

Chris: [00:25:15]     Well, I’ve been – I’ve been talking about this for over 20 years now, and people are now coming up and saying to me, “Now I get it. What you’ve been talking about,” and the shifts are happening right across the world. There are some significant shifts, both in real estate marketplaces, in how organizations are rethinking their proposition, and there are some great examples across the US.

 

But there’s also a shift on the part of cities and towns thinking, how do I – how do I help my community prosper as we come out of the lockdown. You take Tulsa, Ohio, they’re the middle of the country, they’re offering, I think, $10,000.00 to families to relocate there. They’re not interested – are not focusing on getting big corporates to relocate, they’re looking for the people, so that tells you something in its own right.

 

You look, you know – there’s some bigger things, you know. We hadn’t even talked about Monday to Friday, nine to five, and the traditional work week. Spain is about to launch a country-wide experiment of looking at a four-day week. Paris is looking at, what they’re calling, the 15-minute city. So, there’s to reduce traffic to all the major boulevards in Central Paris and to work, or to develop a pattern whereby nobody is – it’s not anything more than 15 minutes from their home to where they work, which is, you know, revolutionary, and is being taken up by the one – I can’t remember the city in the US that’s taking the – having a look at this as well, but Amsterdam and Barcelona are also going down this route.

 

So, there’s – there’s a whole raft of big shifts taking place right across the world as people grapple with how to – I mean, and you need to business because business is important, but to do it in a better, more sustainable way, which is focused on helping people do their best work, clearly in – in a manner, you know, fair day’s pay for a fair day’s work.

 

Hanna:         [00:27:27]     Sounds good to me, Chris. [Laughter] I’d like to thank you so much for sharing some smart ways for us to reconsider the value of the office workplace and some options.

 

If you’re listening and you’d like to contact Chris, learn more about his work on how to improve workplace productivity or his book “Where is My Office?: Reimagining the Workplace for the 21st Century,” you can find that information in the show notes for this episode at businessconfidentialradio.com.

 

And if you know someone who could benefit from Chris’s advice, whose been wrestling with the office space productivity issue, tell them about today’s episode. Share the link to the show, leave a positive review on your podcast app, or at lovethepodcast.com/businessconfidential so others can discover what you did to.

 

You’ve been listening to Business Confidential Now with Hanna Hasl-Kelchner. Have a great day and an even better tomorrow. [Music]