Each year, the San Francisco Chapter of CoreNet organizes what is perhaps the industry’s most fantastic evening and celebration. It also gives out awards to two exemplary executives who are remarkable in their own ways and have contributed to the industry in many ways over years and in some cases decades of dedication and peer recognition.
This year’s celebration convened at the Westin St. Francis Hotel in San Francisco on November 17, 2016 where the guests did their absolute best to kick off the Holiday celebrations and give themselves a night off during what is proving to be another memorable year for Bay Area real estate.
The two executives whose work was so elegantly presented at the event were Jim Morgensen, vice president of Global Workplace Services for LinkedIn, and Steve Hargis, principal at Woods Bagot and leader of the firm’s Global Consulting practice. We asked them to talk about the industry, the opportunities and challenges we face today and how their experience has changed them and made them into the truly remarkable people they are today.
The Registry: We’ve had a pretty remarkable ride since the last recession. What concerns you at this point in time as we are entering the late stage of this cycle?
Steve Hargis: Who says it is a late stage? Things have a way of surprising us.
Having come to the Bay Area a little over 20 years ago, I have a vivid memory of the fate of many high-tech companies that overbuilt in the late 90’s and regretted it later, some even putting themselves out of business. Years of real estate divestitures characterized our industry…a place none of us want to go again. I hope that my peers across the industry are putting the appropriate filters on growth needs and tempering what often seems as unbridled expansion demands by the business…the source of our party as well as our plague.
TR: Aside from economic shifts, what are some of the other most pressing challenges that you face as a CRE professional?
SH: Talent—finding it, securing it, affording it, keeping it. I believe this is the primary challenge that we all face, whether it is the talent that runs our own business, or the impact that catering to the talent requirements of our clients has on our business model.
Economics of the Bay Area—running a service business in this increasingly competitive market, in terms of the space required to house our own business as well as the difficulty that employees face in housing themselves and their families.
Watering down of strategic services—in many cases services that create value for our clients are becoming part of main-stream delivery too quickly, often resulting in easier access but at a lower quality level—not a particularly good end game.
TR: It seems as though the workplace is at an all time high in terms of the perception in the C suite that it is a strategic tool for attracting and retaining talent. How does this increased pressure impact you? How do you move quickly enough to get the right space online in the right locations?
SH: Design is increasingly recognized as an indispensable tool for change. Human-centered architecture is increasingly championed for its potential to create value. These are both triumphs for my primary business focused on the built environment, so times are good.
If there is a negative, it would be around the speed of delivery…hard to complain too much as it is an inevitable by-product of our economic times. Though we all strive to do our work more efficiently and effectively, it comes with a potential hit to creative output and quality of solutions that must be accounted for in the business cases we construct.
TR: You both have been in the industry for some time, what has changed since you entered the industry and what remained the same?
SH: The changes I’ve witnesses over the past 20 years are overwhelmingly on the positive side: Increased outsourcing including fine-tuning of the model to the mutual benefit of all involved parties. Continued escalation around the value of design to contribute to organizational success. Increased employee centricity of real estate and design efforts.
One nagging constant—the traditional undercurrent of personal ownership of space that continues to seem an absolute in our culture. There is a place for it, but all too often it remains as the default position, which can inhibit other creative options.
TR: In today’s world, perhaps never seen before, we have five generations of employees in the workforce, from the Silent Generation to Gen Z. How have you had to look at your work and workplaces that you deliver differently with that in mind? What have been some challenges around that and what have you learned about the evolution of workplace from that experience?
SH: Workplace evolves with the needs and preferences of an ever-changing employee demographic, but the process is generally additive, rarely deductive…nothing ever goes away. This is a good thing in terms of broadening experiential variety. Remember when the industry was stuck on the idea of ‘alternative work environments’ as a replacement for traditional work environments? We soon learned that choice and control are more important contributors to our end goal of employee satisfaction and therefore work effectiveness. We are now focused on the breadth of solutions, which can, unfortunately, sometimes come with a hit to the metrics of space utilization.
TR: In today’s world with access to social media, it is easy to just look at someone else’s design and say ‘I want that.’ But form must follow function and culture, so what are some ways in which you have to work to maneuver that and make sure that the client is tapping into their own culture and work process?
SH: I find the ‘me-too’ syndrome less of an issue than it has been in the past. Misfits and mistakes have been numerous, and often painful, and I would like to think we have contributed to an increased integrity in the workplace decision making process. Companies are made and broken on culture, and regardless of where you fall on the startup-to-established organizational spectrum, the need for a company to have a clear expression of who it is and what it cares about has never been stronger. Space is a major contributor to the making and keeping of culture. I see most Bay Area companies valuing a process that charts an authentic course. In addition, we benefit from a maturing workplace strategy profession, which has resulted in some level of workplace diagnostics becoming a normal part of the design process.
TR: Is the Bay Area leading the industry in workplace design and ideas and creativity? You have travelled across the globe with your jobs, do you see our region impacting how people across the world go to work? When it comes to workplaces globally, how do you create spaces that communicate corporate branding and culture and at the same time address work styles and culture of the local community?
SH: Leadership in creativity in workplace design is a dubious goal. While the Bay Area leads the world in certain areas—I would venture to say the provision of amenity space and the embodiment of brand in space—the legacy overtones of North American culture along with established norms of the engineering function have put us on a trajectory that is distinctive (and in some ways slower) than what has been realized in other parts of the world. A clear example can be found in the adoption of activity based working (ABW) and the more agile methodologies that have enjoyed much greater uptake in other parts of the world.
All that said, we have accomplished a great deal that we can be proud of. When my family and I came to the Bay Area in 1995, I feel like I joined a grand experiment—a transformation of our industry. In those two decades since:
- We’ve refocused the real estate industry from bricks and mortar to human capital, birthing a brand new profession around workplace strategy.
- We’ve exposed the indelible link between space and culture, and continue to work solve for the spatial stagnation and indifference that has been the legacy of the workplace.
- We’ve made an impact on the lives of millions of workers… and hundreds of organizations and communities.
- We’ve blurring the lines between CRE and service provider, assembling teams across organizational lines to bring the best partners together to get the job done.
And with all that, we’ve gotten a seat at the table.
- We’ve helped teach the world some basics—the structure required to guide and focus the customization otherwise necessary to ensure relevance at the local level. One thing is consistent across the globe—engagement is key to success.
TR: Tell us about your involvement with CoreNet, how has the organization helped you navigate your life and build your career? What would you say to anyone considering joining it and to those who are already members?
SH: My involvement in our professional organization began in 2000 with IDRC, one year before IDRC and Nacore merged to form the CoreNet we know today. My original focus was with the global organization developing and teaching the first MCR course on workplace strategy, which has formed the foundation for the MCR.w three-course curriculum of today. Faculty involvement has been one of the most rewarding experiences for me as it has greatly broadened my network of relationships across the globe, as well as contributed to a common foundation of knowledge for both end users and service providers.
In 2003, I was elected to the Northern California Board, and to the Global Board in 2008. The majority of my local involvement has been in the development of monthly programs, which has been a direct contributor to my career aspirations for thought leadership around workplace strategy and design.
My advice to all is to sign up and show up. Value comes in deep involvement and it is imperative that you make it a priority—participation is not optional.
TR: What does receiving CoreNet’s top honors mean to you?
SH: It is nice to be recognized for just doing your job. The award confirms what I want and expect from this profession…that we are all stronger together, focused on a common goal, vanquishing a common enemy. One of my early Bay Area mentors often used the phrase ‘all the wood behind one arrow’ to describe the world we were all after. This is what CoreNet means to me—this is what we have accomplished—and I am honored to be an integral part of it.
TR: Are you seeing enough young people entering the field today, and do you feel the industry is getting enough fresh perspective to keep young talent interested in the industry?
SH: I am comforted by the variety of backgrounds of folks entering the profession. I used to go to CoreNet events and know everyone…now I am in the minority. There is a good influx of talent. For end users like Jim [Morgensen], the breadth of their influence has increased greatly to include exciting new areas like health and well-being, travel, fleet, etc. For the big service providers, they have gotten increasingly close to their client’s business. For designers like me, the output of our creative talents is increasingly tapped to add value and influence. Our industry is expanding in surprising and satisfying ways, which I believe will continue to be attractive to those who might join us.
TR: What are you doing to attract and retain people for your teams? How are you preparing them to deal with the challenges of CRE in a changing world?
SH: For my firm, Woods Bagot, specifically, I will note three areas that contribute: The quality of work product continues to be a draw for those who want their design work to make a difference. Our strong and visible culture attracts those wanting to share a collective experience that extends well beyond commercial success. Impact across regions, around the world, draws those with their sights set beyond the immediate Bay Area.
These things come together to help us change the world—a goal for which the real estate industry is well positioned for.
TR: What advice would you give to a young professional enter the field today? Did the same advice hold when you were entering the industry?
SH: I would advise young professionals to cast a broad net—this is a very diverse profession, in my experience one that is continually reinventing itself and spawning new specialties. It is important to get as many experiences as possible, building an understanding of all aspects of the business and the perspectives of all players. When I started working, I had no idea where my career would take me, and though design has always been the primary focus for me, the new ways that design has been applied in the creative solving of business problems continues to be a source of surprise and delight. A great example is the birth and flourishing of the specialty of workplace strategy, which did not really exist even 20 years ago. I have been blessed to be on the leading edge of that journey.