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?
Jim Morgensen: I’m always concerned about where the market is versus our demand. Overall, we’re used to the cycles and how to respond with regard to LinkedIn real estate—it’s about matching our anticipated demand versus the market opportunities. As our demands change, we’ll look to optimize the opportunity. We’re pretty well positioned in most markets, so I don’t really expect any significant impact.
TR: Aside from economic shifts, what are some of the other most pressing challenges that you face as a CRE professional?
JM: I would say changing norms on how space gets used drives everything we do, for example how much space, how it gets built-out, how flexible, etc. We’re seeing changes in our users’ expectations morph quite quickly. Part of it is due to social media and the fact that people see how other firms occupy and use space in real time. They see what others have, and push us to develop environments that are equal or better.
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?
JM: It’s all about attracting the right talent. Workplace is one of many important elements, culture and benefits. The C-suites are paying attention—they are using the “tool” on workplace to differentiate their companies and help foster the type of culture to which they aspire. So yes, the pressure is high to get it right. To do it right takes time and requires significant input from stakeholders. That input, and ultimately that ownership, is critical to the success. Since our workforce is diverse, we want to develop workplaces that embrace and celebrate that diversity. Such workplaces are more inclusionary, which helps foster productivity and employee engagement.
TR: You both have been in the industry for some time, what has changed since you entered the industry and what remained the same?
JM: I would say the biggest change is that work was much more individual than it is today. Today, work is more collaborative and requires more thoughtful design to augment and enhance that collaboration.
What is the same: How real estate deals in the U.S. get compensated—landlords are still compensating tenant brokers for their representation. I still fundamentally believe that the end user of the service should be compensating those that they hire (i.e. tenants paying for their tenant representation.)
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?
JM: We spend a lot of time understanding what the requirements are, how people work, how teams work, and how to try and best fit all of that into a flexible space. We believe the key is having lots of solutions and not forcing a “one-size-fits-all” approach. We design space to accommodate the teams working in the space, while trying to maintain flexibility. In the end, it’s more about the work those teams do, and not if we’re efficient in designing the space.
TR: As your organization enters the merger with Microsoft, how do you approach workplace at both companies and try to link up the culture of one with the other? How have your past experiences with M&A activity informed your approach?
JM: We are embarking on that process, so I can’t comment.
In terms of past M&A experience, I feel that it’s always important to be highly sensitive to the culture of the company being acquired and make sure that as an acquirer, the special elements around that culture are not quashed or tossed. For example, when LinkedIn has acquired companies, I always ask the leadership if there are elements that are important that we should try to keep, especially in terms of space, graphics, sometimes even furniture.
TR: How do your organizations approach workplace design in this diverse world where employees come from different cultures, countries and continents? Are there any common norms that transcend that?
JM: As I noted above, we design spaces for the teams that work there and we strive to incorporate those elements. We want our spaces to be inclusive and to accommodate the whole gamut of working styles and customs that those local teams have. We want that diversity to be celebrated, and something that differentiates LinkedIn space from others. We want that diversity to be reflective of LinkedIn and vice-versa.