Where Is My Office? This question has increasingly generated in the back of workers' minds over the turbulent last eight months. With employees (those who can) being sent to work from home (WFH) during the pandemic, companies are starting to accelerate plans on how their workforce will operate and where they will work in the future.
Unless you’re in the industry you may not know who our next interviewee is, but you’ve definitely heard of the companies that he’s worked for. Chris Kane, who’s written an insightful and prescient book called ‘Where Is My Office?’, operated as the VP 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, White City in London and oversaw the £2bn property portfolio regeneration to deliver a fit-for-purpose estate, a programme that spanned years.
Needless to say, he knows a thing or two on the subject of workplace offices. Beginning his career in an industry that he describes as archaic, Chris has been at the forefront of the ‘office revolution’, where knowledge workers have been ‘un-shackled’ from the traditional concept of ‘one person, one desk’.
Although six years in the making, this book was mighty timely for the year 2020, but the knowledge and insights Chris provides goes beyond, highlighting bold new solutions to workplace practices in the future.
I spent two decades advocating to the commercial property world that technology has freed 21st century knowledge workers from being shackled to the traditional concept of ‘one person, one desk’Chris Kane
1. Can you briefly give an overview of who you are and a bit about your 30-year career in the Real Estate (RE) industry.
I consider myself a lapsed chartered surveyor and a bit of an industry maverick, having started my career in property at Jones Lang Wootton (now JLL). I spent 13 years there, ending up as a partner, after helping them launch a new occupier client facility, their Corporate Real Estate Services.
I was head-hunted in the mid-90s to work for The Walt Disney Company, culminating in the ultimate ‘Mickey Mouse’ job of Vice-President of International Corporate Real Estate, responsible for nearly all of Disney’s worldwide corporate real estate. In 2004 I was appointed Head of the BBC’s Corporate Real Estate, where I had the challenge of overseeing the BBC’s £2bn property portfolio regeneration to deliver a fit-for-purpose estate using the Corporation’s decade-long ‘analogue to digital’ transformation, as a catalyst for organisational change.
This also involved masterminding the foundations of new innovative and creative media, business and residential quarters in White City, London and MediaCityUK in Salford.
2. Your new book ‘Where Is My Office’ is a pretty timely book; obviously you had planned to write it before the pandemic hit. Can you divulge a bit about why you decided to write about the topic and why now was the correct moment in time to do so?
The book was six years in the making, reflecting ideas and theories about the workplace environment honed by my experiences at two highly creative organisations. Working at Disney and the BBC gave me the opportunity and insight to see that the only purpose of the office is to help and support the performance of the business.
However, the property industry in general, which includes my sector - commercial real estate - is very archaic in their approach and has not moved with the times, especially in realising how the rise of technology has changed the workplace landscape. I spent two decades advocating to the commercial property world that technology has freed 21st century knowledge workers from being shackled to the traditional concept of ‘one person, one desk’ and that this in effect was the equivalent of cutting the umbilical cord in terms of how their tenants - the businesses and organisations which occupy their buildings - think about using offices and how they forecast occupancy.
The other reason for writing the book was to help ‘explain’ my industry to the outside world, especially to the C-Suite who often have to make multi-million dollar/pound decisions with regards to their organisation’s property portfolios. I have always believed that business managers and the corporate property sector need to adopt a different type of leadership mindset; one that encourages a convergence of approaches by both sides to create workplaces which inspire employee engagement, foster creativity and increase productivity, while also improving a company’s capacity to compete and create value.
Although the book’s manuscript was submitted before lockdown, I find that the effects of Covid-19 have just accelerated the developments of the Digital Revolution’s seismic shift on the workplace, which were already being gradually accepted by some business leaders and more enlightened corporate property players pre-pandemic.
3. Recently JP Morgan has publicly called for its workers to return to the office instead of working from home. There seems to be a concern from some managers and CEOs that when working from home, employees aren’t engaged or focussed as much. Do you think flexible working (primarily WFH) will ultimately see a reduction in worker productivity?
Even before the pandemic, studies in 2019 had indicated that organisations with a more ‘employee-centric’ approach saw a 16 per cent rise in productivity, and this increased between 10 to 20 per cent in most developed countries mid-crisis while most people worked from home.
I have always believed that the concept of managers insisting on being able to see their staff and have them physically present in the same office is a misguided approach. Particularly since no one can actively manage people on an individual basis at all times, especially if a team grows in size and projects get bigger and more complex. It would be more beneficial for managers to foster ‘trust-based relationships’ with their employees, which would leave leaders free to concentrate on the constructive management of the factors which add to the business’ productivity, through engaging the workforce in a better way.
Ultimately, this builds up the case for flexible working, where it is irrelevant whether your people are three minutes away down the corridor or 300 miles working from their own home – the premise being that you will get the best out of people by freeing them up and they achieve more when they feel in control of their work
On the topic of companies like JP Morgan calling for employees to return to the office instead of working from home, many like HSBC, Goldman Sachs, Barclays and PwC have postponed plans to bring staff back to their offices in the UK to next year. In the US only 14 per cent of employers say they plan to make returning to the office mandatory. In fact JP Morgan sent some staff back home in August (2020) in the US after employees who had returned to the office tested positive for the virus.
Employee safety and welfare is now a paramount concern and most corporations cannot afford to be seen to ignore health concerns during the uncertainty of this global pandemic.
4. Depending on what type of trading you do, traders as well as other professions may still need to be present in the office, especially when tech is expensive / not WFH viable for data protection or latency advantages etc. Will these types of roles still be affected by this ‘office revolution’?
Firstly it cannot be stressed enough that a ‘one size’ solution to the current workplace dilemma does not fit all and it never did even pre-pandemic. Each industry and sector has its own demands and needs which have to be considered and accommodated in the appropriate way.
Also another view I hold is that we all have a bipolar view of work – one that involves either working at the office or at home. However the truth is that it is now possible to consider a much wider permutation of options, an omnichannel approach which I call ‘omniworking’. This involves not only where work is done, but when it gets done. It also retains traditional core office structures, such as headquarters which will be leased, but can also be expanded to include the emergent range of flex sector options; including working from home, in cafés, on the move and in a plethora of flex-space options.
This ‘work-from-anywhere’ model enables employees to manage their schedules between remote work and the workplace with organisations enabling them to visit any work location anytime when they need to be physically present, be it for collaborative work, accessing better technology and for IP security reasons or for brain-storming and inducting new colleagues.
5. Do you think companies will need to make the ‘new office’ a place to go and a place to experience instead of somewhere where employees just go to work? You mention in the book that real estate should be seen as “…as a service not an asset…” and should be “…creating an emotional connection to the workplace…” By providing an engaging and stimulating workplace this should in turn help with attracting and retaining talent?
These are the factors which alternative workplace providers, flex and co-working space options have tapped into, the importance of the ‘people-factor’ over the ‘property-factor’. What they did was to disrupt the traditional workspace model and make it compelling for people which creates an emotional connection to the place they work.
This is not just about offering their occupiers comfortable and appealing workplace surroundings and on-site coffee baristas. This is also about seeing the potential of the buildings as an ecosystem in fostering a creative workplace experience for the businesses which occupy their spaces. It is a start of a much more profound revolution in how we use our working environment and one where business leaders need to take a more active role in shaping in order to attract and retain the best talent to maintain competitive advantage.
6. Considering companies RE portfolios and functions traditionally are seen as a cost, bottom of the chain and not much of interest to C-suite, as it’s not the company’s main focus of business. Do you think C-suite is starting to see that RE can be utilised to enable and drive business and provide value when they start looking at their portfolios as a ‘people factor’ and not just a ‘property factor’?
One of the overriding challenges of my 30-year career has been to enable business leaders and the C-Suite to see the missing link to make that all-important connection between how an effective office can add value to their organisation. Living as we are in pandemic times the workplace and the future of the office has hit centre stage.
Enterprise leaders now have to consider how the workplace can become part of the corporation's arsenal of competitive weaponry in this increasingly connected world where brand and reputation are crucial factors. People are a business' most valuable resource and ultimately their engagement with their working environment is paramount to an organisation's success.
As a consequence of the lockdown staff are rethinking their priorities as they consider personal safety and commuting aspects like never before. The important question here is how many business leaders have made the connection between productive staff and a productive workplace. By creating a meaningful work environment and effective workplace, business leaders can become an employer of choice and gain competitive advantage over their competitors. In these pandemic times this requirement is even greater and savvy leaders will give serious consideration to the creation of distributed workforce and workplace strategies - ones that are resilient, cost-effective and people-centric.
7. To what extent do you think technology has helped accelerate this industry shift in the way we are working? Or is technology the sole reason there is change in the first place? Are other factors such as supply & demand or PropTech driving influencing this also?
The relentless march of technology in the last two decades cannot be ignored. It has been picking away at traditional analogue ways of working quietly in the background. Other drivers such as the war for talent, societal shifts, macro economic factors have conflated the movement to a truly digital world of business like never before. One could say that a storm was brewing already as many commentators were using the label VUCA to characterise such – volatile, uncertain, complex and ambiguous. Covid–19 has without doubt whipped it up into a tornado of change.
8. Are we going to see a monumental shift in supply and demand of offices (or at least the type of office), with excess supply potentially coming on the market. Corporates are undergoing rapid space reductions off the back of Covid-19, combined with the pre-planned office stock coming online, who’s going to take up and occupy these spaces, have we seen peak office demand?
This is not about traditional and supply and demand considerations any more. Today’s crisis is nothing like historical real estate markets dips associated with the global financial crash and the Dot.Com bubble crash. Not only has the game changed but the stadium has also.
Up to now the only route to consume commercial real estate was to buy, lease or sublease. A very cumbersome, expensive and time-consuming process. One which is no longer fit for purpose in our on-demand times. The new kid on the block – flex space only accounted for 5–7% of total supply up to the start of the year. I see that exploding to 50% in the coming 3-5 years. For property companies this is not only a challenge but an opportunity. Property Companies need to recognise the shift from just dry leasing space (do the deal, go on vacation and collect the rent) to a model where space as a service becomes the norm.
Overall, I think we have hit peak office but who knows. What I do believe is that savvy property companies will adapt their traditional modus operandi. Possibly by embracing something akin to the hotel sector model based on Prop Co and Op Co thinking. This would include space as a service as a core offer. The emerging model could also support the occupier's move to a distributed workforce management. Could a property company think of themselves as the workspace platform for its customers – where they provide space on a variety of levels with a plug and play dimension? I call this a shift from fixed to fluid.
9. In the book you mention “business agility is no longer a luxury; it is critical to survival”. Ways of working are changing/have changed and with technology businesses move and grow rapidly. Do you think moving to flex offices (such as WeWork) saving on costly fit out CapEx, having shorter and more flexible lease terms, along with then not having high exit costs such as dilapidations and depreciation write offs etc. is therefore looking like the better option for companies?
I think we'll see a mixed blended set of solutions emerge with one common feature – rather than bricks and mortar at its core it will be replaced by technology. There will always be a need for traditional CBD offices but it will form part of an array of choice for the corporate consumer. The Flex sector with WeWork, Regus, Convene and a host of others will have their part to play also. As will text technology solutions such as LiquidSpace. We are seeing not only the end of an era but the change of an era in terms of how we think about commercial estate.
10. Back in the 1980’s/90’s business parks in the UK were all the rage, however are now seen as undesirable to most people; old tired buildings, in the middle of nowhere, no amenities, not enough parking etc. However do you think business parks could be re-purposed with small flexible office space or satellites for companies wanting to meet the demand of their employees to work more flexibly and closer to home? If people aren’t commuting into the larger cities and towns so often, will occupiers look to occupy more smaller spaces for their workforce to drop in and use?
Anything is possible in my view - all it requires is some imagination. What one also needs to consider is that a lot of us have fallen out of love with the car. I think we're going to see a renaissance of the High Street first before business parks. If smart solutions can be developed which breathe life into a business park that would be great. They would need to comprise a wide range of uses, supported by retail and community activities. Possibly with some residential included.
11. How do you think industries and the economy will be disrupted now that many of their employees will be able to work remotely from anywhere and even possibly start employing in cheaper markets now that location isn’t as major a factor? Do you think that it might also impact where people decide where they want to live, affecting real estate (homes and offices), how they shop and in turn affecting the physical retail industry etc.? Are we starting to see a shift in culture, demographics and the way the economy works?
I call this a shift from fixed to fluid. The lockdown brought about by this dreadful pandemic has given rise to some significant and unprecedented behavioural change. It is like nothing we have experienced since the Industrial Revolution. It is also different in that it has impacted both employers and employees in equal measure.
We have never a situation before where office workers are reluctant to return to CBD offices due to fear mixed with the changing view of life and work. The genie is out of the bottle and widespread change is staring us in the face. This shift is happening now and needs to be understood, as the ramifications will be pervasive and far-reaching.
Where is My Office?: Reimagining the Workplace for the 21st Century by Chris Kane, in collaboration with Eugenia Anastassiou, is published by Bloomsbury Business on 15 October 2020. Available at Bloomsbury.com and at all good bookshops. Hardback & ebook, RRP £25.