The EG Interview: former BBC real estate boss on the post-Covid workplace

You could say that Chris Kane made a Mickey Mouse job of the earlier years of his real estate career. That’s not the insult it might seem to be – Kane spent almost seven years as a vice-president in the corporate real estate division of the Walt Disney Company, helping to overhaul the group’s property function. From there, the former JLL partner headed to the BBC, where he spent almost 12 years until 2015. As head of corporate real estate, he oversaw the £1bn redevelopment of Broadcasting House in London, as well as helping to drive the organisation’s relocations further afield, including the creation of MediaCityUK in Salford. Now, the 60-year-old Irishman wants to pass on some of his thoughts about how and why our workplaces need to change, gathered not only at Disney and the BBC but also in non-executive roles he has held since at companies including NHS Property Services and Networking Housing Group, as well his own workplace consultancy, Six Ideas. There has never been a more pressing time to rethink our offices, Kane says. The workplace was already changing and working practices were already in a state of flux, he adds, but “Covid has brought it all together and poured high octane fuel on it”. Kane is hopeful that the coronavirus pandemic will ultimately prove to be a catalyst for positive change in the ways that workplaces are designed and the ways in which company bosses and their employees relate to them. But don’t expect the shift to be small. “People have talked about going back to the new normal,” he says. “I don’t think it’s going to be a new normal. It’s a new reality.” Best of the brains We speak a few days before the publication of Kane’s Where Is My Office? Reimagining the Workplace for the 21st Century (Bloomsbury). Six years in the making, the book explores the changing significance of corporate real estate, drawing on Kane’s own experiences – most notably at the BBC – as well as interviews with industry figures including IWG founder Mark Dixon and WeWork’s Ronen Journo. Our interview takes place over Microsoft Teams. We are only a matter of miles apart – Kane in southwest London, me in southeast – but of course, as the Covid-enforced lockdown has shown us, we could be anywhere. And that change in working practices and locations, accelerated to light speed during recent months, means Kane is publishing his book at a pivotal moment in the development of corporate real estate. “This has been a very difficult time for a lot of people – there’s been a huge amount of suffering and a huge amount of mental anguish and stress,” he says of the pandemic. “We’ve yet to see the real fallout in the real estate world. I think human beings are made of stronger stuff. But we’ve got to start talking now about trying to get the best of the brains around our industry and the external world, for the first time ever, chatting in a coherent and a collegiate fashion rather than trying to bring up adversarial, outmoded 20th century thinking.” Companies are saying, ‘if you can deliver what I need from you in five hours or 50 hours, I don’t care. But you don’t need to go into the office just to send emails’ Underpinning the entire discussion, Kane says, is the simple fact that companies need to hire and hold on to talented people – and, if the most in-demand talent now wants to work in a different way to years gone by, companies will need to work out whether their property portfolios should change in response. “You hear a lot of talking about the ‘three plus two’ week,” Kane says, referring to the idea that workers will split the working week between the office and home. That’s too simplistic, he says. “We’re still trying to force our thinking around Monday to Friday, nine to five. It’s going to move to an outcomes-based world in the not too distant future, where companies are saying, ‘if you can deliver what I need from you in five hours or 50 hours, I don’t care. But you don’t need to go into the office just to send emails’.” A shift to distributed working and a more dispersed workforce will be unavoidable for most companies, Kane predicts – and that shouldn’t be anything for the real estate industry to fear. “Many people would view it as a challenge for the industry. I would see it also as a huge opportunity,” he says. “How can a smart property company be the platform to provide its corporate customers x-thousand square feet of corporate headquarters in a city centre, to y-thousand in the suburbs, to a whole lot of smaller, localised work hubs? All of that is going to mean a fundamental redefinition of spaces and places.” From London to Silicon Valley As an industry, real estate has been slow to acknowledge change, Kane says, and slow to offer occupiers more than bricks and mortar and a standard lease to sign. “The industry hasn’t really copped on to the fact that the nature of consumption has changed, and the power has shifted from the producer to the consumer,” he says. The industry has also been slow to work out how to communicate with that end user. Kane recalls apologising to former BBC director-general Mark Thompson for mixing up square feet and square metres in a board presentation. Kane explained to Thompson that the real estate industry leases in square feet and builds in square metres – and he had got confused putting the presentation together. “How do you think I feel?” Thompson replied. “Many people and many heads of corporate real estate I spoke with say there isn’t any emotional connection,” Kane says. “Everything is done through third parties, understandably, because that’s the broking system. Apart from maybe a meeting or two to sign a lease or something, there’s no connection.” Companies in the US have made greater strides in this respect than elsewhere, Kane adds, including in the rise of co-working and flexible workspace providers. “My question to the industry is how many of us understand the customer journey?” Kane says. “Looking at the series of handoffs and the amount of expense and effort required to procure space, is there any wonder that the likes of Mark Dixon [and other co-working entrepreneurs] have become as successful as they have?” He adds: “WeWork did the whole flexible market a huge service by actually bringing this concept to the eyes and ears of the c-suite, [where executives said] ‘I was told you either had to take that building at that lease or buy that building. Maybe I do have real choice’.” [caption id="attachment_1060923" align="aligncenter" width="847"] As head of corporate real estate, Kane oversaw the £1bn redevelopment of Broadcasting House[/caption] Is the industry prepared for the next shifts that will happen in the wake of the pandemic? There are parts of the real estate sector that critics say are kidding themselves that markets will return to normal, including leasing agents who insist that demand for city centre locations is strong even as their own agencies’ figures suggest otherwise. “I can’t say I blame them,” Kane replies. “I mean, if you look at the last 10 years, if you’ve been in the development world or in the leasing agency world, things have been very good. You’d want to hold on to that, and the best of British luck to them. The challenges are that what’s happening is so pervasive and none of us have ever experienced that pervasive nature so far.” And it’s happening in every city, Kane adds. “This is not just particular to Britain, to London, to Birmingham, to Belfast. It’s happening all over the place. If you talk to anyone in New York, they’re saying there’s going to be some really big fallout. If you look at the West Coast in the US, for the first time ever I’ve been speaking with Californians who are genuinely concerned about Silicon Valley and its medium to long term sustainability.” Guardians of the built environment Given Kane’s work on building out the BBC’s regional real estate network, I ask for his thoughts on how Covid-19 will affect corporate occupiers’ views of cities outside of the capital as cost-cutting and concerns over commutes bite. What will the pandemic mean for London versus the regions? Kane pounces on my choice of words. “I like the way you talk about London ‘versus’ the regions,” he says. “I don’t think it’s a case of one location versus another anymore. I think it’s an ‘and’. I would suggest that it’s London and the suburbs and the small towns of Southeast England and some of the regional cities. For the first time ever, organisations have the opportunity to think on a network basis rather than a place basis.” Occupiers seem ready to grasp that opportunity, he adds. The next necessity is for “the guardians of the built environment” to help them do it, to think more creatively about how they choose, use and manage their workplaces. “I’ve chatted to a few [occupiers] recently and their view has changed from ‘how do I get rid of all my buildings?’ to ‘is there another way?’” he says. “There is a real appetite for the industry to come up with some solutions rather than say ‘first of all, you’ve got to pay all your outstanding rents and here is your standard five- or 10-year lease’. We have to understand that we’re no longer offering dish of the day. We’ve got to offer à la carte.” To send feedback, e-mail tim.burke@egi.co.uk or tweet @_tim_burke or @estatesgazette Photo: Matt Brown Flickr