Complexity is the defining business and leadership challenge of our time. But it has never felt more urgent than this moment, with the coronavirus upending life and business as we know it. For the next few weeks, we’ll be talking to leaders about what it takes to lead through the most complex and confounding problems, and about Brody Moments (from Jaws’ Police Chief Brody and his famous line “you’re going to need a bigger boat”) related to the coronavirus.
Today we talk with corporate real estate veteran Chris Kane, author of the forthcoming book Where is My Office? Reimagining the Workplace for the 21st Century (December 2020). Kane was the Vice President of International Corporate Real Estate for The Walt Disney Company, before acting as Head of Corporate Real Estate at the BBC, where he was responsible for the creation of MediaCityUK in Salford, oversaw the £1bn development of Broadcasting House, and masterminding the foundations for a new creative quarter in White City, London. He is a Fellow of the Royal Institution of Chartered Surveyors and a founding member and director of Six Ideas, a global consultancy focused on workplace development and innovation.
David and David: Can you give us an example and context about a specific Brody Moment from your past?
Chris: Early in my time as BBC’s Head of Corporate Real Estate, I had a Brody Moment when Mark Thompson, BBC’s Director-General, said to me: “I’m not going to spend all this money on real estate unless I can get a lot more value out of it. I want to use it as a catalyst for changing the organization and moving it from analog to digital.” That made me realize that this wasn’t just about buildings - it was about something much bigger. My role was to reimagine real estate, turn property into a strategic asset, link it with the brand, and align it with the company’s vision and mission.
It was clear to me that I didn’t have the right team to make the necessary changes. I had a couple of hundred people in-house and another 1500-2000 outsourced people who were all competent real estate folk and very traditional. They knew how to build a decent building, how to do a real estate deal, and how to do facility management, but they weren’t the right group for what was ahead. So we got out of a 30-year PFI (private finance initiative) contract in year four, restructured the entire real estate team, brought in new people, and ran a change program within a change program. We did all that while dealing with a property marketplace that didn’t really care about what we needed.
David and David: What are the Brody Moments that you’ve seen people experiencing over the course of the pandemic when it comes to their offices and workplaces?
Chris: The pandemic has disrupted both the corporate real estate sector and the traditional managerial mindset that absenteeism means a lack of productivity. I wrote my book expecting it would be a slow burn to get the sector to change, but Covid-19 has changed the ballgame and the stadium. Prior to the pandemic, managing real estate was about driving efficiency with very little thought to effectiveness. Now, leaders are thinking very differently about the purpose of the office, and they’re realizing they have choices beyond this building or that one. Many other permutations are available, and that has enormous implications for the sector.
The pandemic has accelerated the shift from a fixed to a fluid use of workspace. Now people are saying we can work anywhere, anytime and anyhow, and they’re seeing that this can be a competitive advantage - harmonizing workforce and workplace - in terms of talent attraction, health and wellbeing. And whether people are having a good experience working this way, or bad, they are being forced out of their traditional ideas about work. They’re also being fuelled by fear. Employees are afraid to go back to work when there's still a risk that they might catch this horrible disease and die, and employers and members of boards are afraid to demand that people come back into an office environment because they are potentially exposed to litigation if somebody gets sick and dies.
David and David: What do you see moving forward for offices and office buildings, and the supply side of the sector?
Chris: About 18 months ago, WeWork let the genie out of the bottle by helping consumers of real estate realize they have a much bigger choice than just buying a building, leasing or subleasing. There was already a hidden paradigm shift taking place pre-Covid, with smart people in the real estate sector thinking about how the big corporations are evolving, and recognizing that the sector has to adapt - and then Covid came along and changed the game. For the supply side, this is existential because everything is driven by having a 5, 10, or 20 year lease, and now “Oh my God, this nice little earner is disappearing in front of my eyes.”
There are many who hope that everything will go back to normal, but that’s not going to happen. When it comes to office towers, the smarter ones will deal with large scale vacancy and gain a competitive advantage by quickly adopting a different model, where (for example) one-third of the space is traditional office use, one-third is flex use, and one-third is something else entirely. And whereas building management has always been passive, sitting there and collecting rent, now they’re going to have to work at it. The office sector is going to have to learn to operate more like the hotel sector, with more focus on the consumer and the brand, more competition and more flexibility.
So while I think it’s premature to declare the death of the office, I can see the “Uberization” of corporate real estate ahead. They need to think very differently, understand the needs and journey of the customer, and be much more fleet of foot when it comes to how they operate. “Space as a service” will be an enormous shift, and the sector will have to quickly reshape the entire model to move away from an investor mindset to a service provider mindset - as opposed to sitting there, arms folded like the 180-pound gorilla, saying it’s $100 per foot, take it or leave it. Those days are over.
David and David: And what about the consumers of office spaces, employers and employees?
Chris: For employers and employees, we’ve been stuck in a very traditional bipolar debate between office and home, whereas there’s lots of choice and it’s not just about physical space. Work is moving from being process work performed in an office, to knowledge work, which can be done in a whole raft of settings. There will always be the need for an office, for people who need to congregate, socialize, and meet, but now, for the first time ever, everyone is asking big questions like: Will Monday to Friday, 9-5 survive? What’s the purpose of the office? How much footprint do I need? Am I going to need leases or service contracts?
David and David: Any other advice you can offer? Parting words?
Chris: We’re all focused on dealing with the short-term consequences of Covid-19, but we also have to be mindful about the medium and long-term implications. Pre-pandemic, we were facing a climate change challenge and that hasn’t gone away. We are guardians of the built environment and custodians of this earth for the generations that follow us, and we need to think about whatever adjustments we make in the light of both short-term and long-term needs. That means getting much more serious about the corporate social responsibility agenda and using our buildings in smarter ways, so we leave a legacy we can be proud of.
Original article posted on Forbes on Aug 17, 2020
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