Redefining Spaces: James Calder on the Evolution of Workplaces and Cities

A lot of organisations are losing 50 to 70% of their first-year intake within 12 months. The role of the landlord is, is evolving from just providing leases to providing shared space, or what we call space as a service. This is the key trend as to what's coming next, and a great thing for people that are interested in this to get involved with is what's called the spatial web. Think of the sustainability benefits, the lifestyle benefits. It's just a really good use of the resources we already have. The property The industry is, I call it radically conservative. It'll do anything it can to stay the same.

Okay, off we go. James Calder, welcome to The Mentor List.

Thanks, good to be here.

Well, it's fantastic to have you in today and looking forward to hearing from individual like yourself around, you're the man behind some of the big investments or the advice around some of the big investments around how do you fit out your new commercial property, for example, all sorts of properties, but, you know, what do I need? Is it co-working? Is it, are we actually even gonna get people back in the office? So really looking forward to digging into one part of sort of your sweet spot in your career. So I guess the first question And given your experience and the way and who you're consulting to, where has it come to now? Where are we now in Australia versus globally? What does a building look like that you're advising on now that might be built in sort of 5, 6 years' time look like? And how is that different? And why is it like that? That's a very big question, James. So let me throw that to you.

Yeah, how long have we got? Look, firstly, I think the global pandemic's been a massive disruption. It's not just a blip.

Yeah.

I can't see things going back to how it was generally. I should say it's, it's a hard topic to talk generally about because it's all in the specifics. Software engineering is a, is a team game. You know, legal work is an individual And, you know, within work styles, it varies enormously. So generalisations in my field are pretty hard to deal with, you know, like those banal conversations about open plan versus offices. It's a bit nonsensical. You have to get into the detail. But for many organisations, this has been a massive disruption. And, you know, some will go back to how they were because that's the natural state of how they work. But a lot of them have changed forever. A great example of that is software development companies. They measure amount of code, the quality of code that's written by teams. Productivity is higher when people work remotely, work online together, and then come together for team building and other things. So there's no doubt about that. You can measure it.

And quite intrinsic. A software developer, the stereotype of a software developer is someone that is quite intrinsic and Or sorry, introverted.

100%, very much.

Yeah, quite introverted. So maybe that suits them personally.

But yeah, and there's, you know, as technology grows, there's more and more of those types of jobs that are there as process work gets eaten by software and AI. So, you know, I can, I can see that there's going to be quite sizable shifts and it will flow through and trickle down. As new management comes along that has moved on from the, I demand everybody to come in, oh dear, they haven't, what do I do now kind of management model to, well, let's build a culture based on how the, you know, we want to work and what our values are telling us we should be doing.

Yeah, and it's interesting obviously reading in the, in the papers about how a lot of the financial services companies are sort of bringing all their workforce back into the office. Not obviously without complaint, I'm sure. How would you be working with those sort of clients in terms of helping them how to rethink the space?

Yeah, same sort of answer. It's very different. Like a trading floor, you know, of an investment bank, it's a real-time, you know, look someone in the eye, make a call kind of work. It's intense teamwork. And even there though, software now does a lot of the more basic aspects of it. But that's, that's very different than the technology. You know, a lot of banks are full of technology people, so, and, and they're in high demand. So, you know, if you want to lose people, demand that they come back when they don't want to.

Yeah.

So it— some of it is, is rhetoric, but I do feel for those companies that have very much thrived in the past on a face-to-face way of working. They They have a lot of rethinking to do or recalibrating their people as to how they want to work.

One of our Mastermind members was one of the first to probably move into a new premise and we all just assumed that, okay, less people in the office, generally speaking, so you'll probably take up less floor space. floor space. They actually took on, I think it was 20% more floor space because of the design of, you know, it wasn't the big client-facing boardrooms on the windows, it was these walls that move around and then the floor goes up and down and it's all these spaces that can be sort of transformed, I guess.

Yeah, for more team activities and getting people together. And it's not just It's not this 9 to 5, Monday to Friday. There's a peak generally Tuesday, Wednesday, Thursday, and Fridays is a drop-off. So I think we've got some real fundamental questions to ask in terms of utilisation and sustainability. Does it make sense having all these towers fitted out for the peak time on a Wednesday and empty for, or significantly lower utilisation for the rest? So it's a really complex, Let's say Alex is a—

let's put your consulting hat on. Alex is a property developer. He's just about to build a brand new skyscraping commercial tower in, let's say, in Melbourne here. What would your advice around the utilisation, best utilisation for that be? And is that different to what it might have been sort of pre-COVID or earlier in your career or in a different country, for example?

Yeah, it was always evolving this way, but that's been accelerated. So what generally companies do, it's a bit different for a large company because they can consolidate their portfolio and, you know, those spaces you're talking about, they've probably got already. So it's around utilising them. It's really hard for a small and medium company. You can't afford to have all these spaces sitting around at—

That's right.

Expensive rents. So what's gonna need to happen is the role of the landlord is evolving from just providing leases to providing shared space, or what we call space as a service.

Okay.

So now we've seen the first wave of that with WeWork. Now what made WeWork really successful, and this is getting a bit nerdy here, so stop me if I'm going too far, but they fitted into the landlord model of leases. But provide flexible space for their users. So if you were 1 person, 20 person, even 100 person, you could go to WeWork and say, we want to rent the space for a week, a month, a year, whatever. Landlords are going to have to start doing some of that themselves and provide space that's maybe pre-fitted out or half fitted or fully fitted out so that you can then just modify it. So I think we're going to see a lot more shorter-term, more flexible spaces, and the role of landlords almost developing the skills of a hotel or an incubator or accelerator, creating a business ecosystem. So I have this, I guess, slightly different way of looking at the purpose of your tower that you're building.

Right.

You probably think of it as a fantastic investment that your children and their children will, you know, use for the rest of their lives. But the only purpose I see is actually for businesses to operate in there.

Yeah.

So that it's, it's a space for business to thrive. And I think more and more we need to create buildings and cities, not a sort of you know, placid things, but active things that, that actually help business to work across business and create ecosystems.

Yep.

And I've been involved in some of the first innovation precincts like Tonsley Park in Adelaide and, and the, um, the medical precinct in, in Adelaide, you know, creating buildings and precincts around particular types of innovation, I think, is where we're going to end up.

Ultimately, because you had Tony on the— Tony Nash on the podcast, and he had a pretty, like, direct view on working from home or versus working remote, especially for the younger generation. Maybe do you want to throw that in, Alex?

Yeah, well, I think certainly— I think a lot of people feel that sort of the younger generation miss out on a lot of the learning that happens, uh, sort of, you know, which by osmosis almost, when you're sitting near people and you're absorbing what goes on on a day-to-day level and the ability to quickly ask someone a question informally. I think that was sort of the main thrust of a lot of people's concern of not returning to work.

That's completely right. And it's that overhearing, osmosis learning, but it's also being able to connect with other people your own age. And because a lot of times younger people are nervous about appearing silly to their superiors, so I think just as important is that peer-to-peer kind of relationship as well, which often gets forgotten. But yeah, I completely agree with that, that there's a whole, you know, we're not going to change a million years of evolution. We do need, and that to bring people together, particularly for that learning by osmosis. And in some cases, some of our clients were actually in areas where they're trying to recruit, like, you know, the software engineers again, they're actually building lounges in the in the office, which is like a transition from their bedroom, the university as a segue in, 'cause we don't need the same model of the office. So we're building new spaces that haven't been in office buildings before as a sort of a transition to make so they don't lose, you know, a lot of organisations are losing 50 to 70% of their first year intake within 12 months.

Wow, right.

Because that experience is not a good one for them. It's too much of a leap from, Sitting in your bedroom coding.

Yeah. Yeah. I think the other interesting point Tony made the other day was saying that the opportunities typically go to those people with face time with the senior management, effectively. So if they happen to be in the office, then obviously I think the perception is those are the people working, doing, willing to put the hours in. Therefore, they probably get the first opportunities. So potentially, maybe that's a question about measuring output.

That always used to be the case when— I mean, this isn't new. People have been working in a remote way for a long time, particularly in places like the UK. As soon as the mobile phone and the screeching modem were invented, we had people working in lower, different environments. This isn't new, but that was the data that those people that worked more remotely were the first to let go in recessions and got the last in the line for promotion.

Yeah, totally.

But another side of what you were just saying is that executives or leadership now need to be much more present in the workplace just to be around those younger people so that there's a real role now to actively spend more face-to-face time on those ad hoc sort of bump type moments. And another thing too is you mentioned introverts before. I think we've gotta do more than just have an event and bring them in. We've actually gotta use nudging, you know, the same sort of software that's on your Instagram where it, you know, if you happen to Google, I don't know, tool chests at Bunnings or something, suddenly you get all this stuff on Instagram, Facebook promoting it. So when you're in the bathroom, you leave your— So same sort of thing needs to happen in space. That, you know, hey, you've got an interest in this or you're working on this project. And organisations like Publicis and others have been doing this for a number of years to use AI to speed the knowledge around. I mean, the— I think this is the key trend as to what's coming next. And a great thing for people that are interested in this to get involved with is what's called the spatial web, which isn't new, but I think— there's emerging a new way to look at it, which is not from the conventional 2-dimensional software companies.

Yeah.

'Cause if you look at your phone and it's all 2-dimensional, it's data, video, images, et cetera.

Yeah.

But think of it the other way, from 3-dimensional space and the human, but with technology-enabled spaces, like 180-degree different way of looking at it. And I think that's where we're gonna go with office buildings is physical nudging and a much more enhanced experience, which is mixing food, events, working. So I see it as a, you know, really dynamic, exciting field, not, not a, oh, let's go back to the way we were opportunity.

Well, because you sort of reminded me, you mentioned sort of the habitual, we're habitual creatures and talked about sort of the evolution and maybe some human behaviours. And maybe I'll just share an example and maybe you can put some colour around it. So I started early in my career at Telstra and at that stage we had all the general manager type, more senior managers that had these offices with fridges and desks. And so you could shut and open the door and it would be that type of environment. There was also, I think, a gym that as an employee you had access to go to. There was also a food cafeteria that you could go to on another level. And so you sort of had your exercise, your food, you had your fridge there, and you could have a refreshment at the end of the day. And then I look at maybe one of my later years when I was back in at Telstra and it was hot desking. So I would take a backpack in with my laptop and whatever else I had for the day, bring my own lunch. I'd have my own gym subscription. I'd put it all in the locker, but then I'd go and sit on the exact same pod that I would always sit and the people around me were the exact same people. So yeah, when you sort of from the inception point where you're like, this is a good idea to move into hot desking because of all the collaboration and things. And then there's the behavior. Was that different or like how does that get factored into some of the—

That's a whole area of, yeah, I mean, then this is where I mean like specifics become really important. Like hot desking is something that was developed for salespeople to have a spot to come and write up stuff when they came in. It's not generally what, you know, people have been trying to do in a modern progressive workforce workplace. But it's almost, in my experience, what's happened is— ideas are developed for models.

Yep.

Pilots are done, experiments are done, and they can work really well. And then people look at it without understanding the depth of thinking that went into it and copy it, and it just looks the same, but it doesn't work. So there's a propensity in design to just copy and paste and to look at the wrong things. Whereas if you come at it from like, the science of work or organisational science or whatever, that's a very different view than what does it look like. Open plan was developed by the Quick-Borner management consultant team out of Frankfurt, you know, and it was highly developed around paper flows and it had plants and cafes and, you know, this is in the '50s, like—

Right.

It was great. Then it got to America and it got dumbed down to Dilbert cubicle land. Same sort of thing happened with this idea of activity settings, which goes back to 1985, a Harvard Business Review article, which basically said an office, that office with the fridge, Yep. or an open-plan desk or a meeting room isn't ideal for all tasks, but it's maybe well suited for one or two. So the idea was provide a range of these ideal spaces, give you the mobile technology you now have and the freedom of the management culture to not have someone watching you work, but you can choose where you wanna work. That's how it started out. And then it ends up getting turned in this massive space efficiency drive and all the good stuff gets thrown out.

Yeah.

That's kind of a history of the workplace in a couple of paragraphs.

I didn't know it was, yeah, 1950s with the open plan. I thought we were really progressive going to open plan in the '90s.

No, not at all.

So I mean, keeping maybe the international theme, and I know you've sort of moved around as well, Alex, and seen the world, but, um, is there— are you seeing anything that's direct contrast to what's happening maybe here in Australia or Southeast Asia, or that you think, yeah, that's probably where things are going, or as an extreme case, or yeah, anything you can add?

I think Australia over the last 20 years or so has pretty much been at the front of what's been going on, with, with exceptions of, you know, really interesting case studies that might pop up. And that's continued. I think there's a, there's a momentum. There's some interesting organizations, um, you know, like the Googles that have a very particular model which are, you know, global. But even then, probably some of their best examples are in Singapore and, and Tokyo, you know, away from the Googleplexes in America.

Yeah.

Things spread very quickly now, ideas, but I think some of the work, I think the next generation of work's going to be in the supply side, so what the landlords are going to do. I think that's where we're gonna see a lot of the innovation, 'cause most, particularly in Australia, it's a bit different in Europe where organisations still build their own headquarters, but here it's all very much leased space. actually driven and potentially at the moment being held up by the supply side of the equation. And, you know, Australian owners are some of the most sophisticated there are, so, you know, I think we'll see that charge here as quickly as we'll see it anywhere else in the world.

Yeah, because that could— I mean, would you be able to explain as well, because I, I find it counterintuitive where, let's say we go back to Alex's It's all built now and he's managing it and he's—

Yeah, I hope it's leased 'cause there's like quite big vacancies at the moment. There is, not exactly. But I'm sure you got it right.

Which is a good thing, right? Vacancy rates are, you know, higher than what they've been traditionally. But landlords, there's a resistance 'cause we're in the market, we're looking for a new home potentially, but there's a resistance to take on a short lease or, a sublease or anything like that because there's this idea, well, not idea, but they'd say it affects the yield of the building and then therefore that affects the sale value of the potential building and therefore that affects the eventual owner who is the super fund or whoever actually owns Alex's building, for example.

Yeah.

But if there's an offer on the table and it's not the If the place is not leased, then why is that transaction being prevented?

We're in a holding pattern at the moment because the valuations are based on the lease value. So what's called the WALE, the weighted average lease expiry. So if you take space out of that and build this flexible short lease space, it gets devalued in the valuations model. It gets devalued. So it immediately hits the the asset value if you're getting it revalued. If it's a private building, it doesn't matter. But if it's in a unit trust or something and it needs to get revalued, it'll— so there's a reluctance to do it. That's, that's part of the equation.

So Alex, property is worth what it could get on the market versus the cash it's getting in the door.

Is that—

Well, that's the second part, that if, if there's not enough examples of these new types of buildings for the valuation industry to say that's a a legitimate form of income that we can bank.

Right.

So it will take, it's kind of chicken and egg until we build the model, get a few years of cash flow and prove that it works. And look, it should increase the value because the, you know, when people move to sharing of space, you know, densities used to be about 20 square metres a person. They whittled their way down to about 10 square metres a person. Everyone was really worried, oh, there's gonna be all this empty space. What it meant was that rents went— go up and utilisation goes up. So I see the same thing happening here, that Monday to Friday, we'll have maybe cheaper space on a Monday if you want a meeting room to encourage startups and others to use buildings. You'll end up this blended rate.

Right.

But overall, you know, every coffee you buy, every room you book, every time you sit down, whatever, the landlord will clip the ticket on it. And that should add up to more than what just a basic lease would project. But we need to prove that before the valuation industry will accept it.

Yeah.

Wow, dynamic pricing.

Yeah, it's a really interesting time. It's a different world than we had the other day.

Yeah.

But imagine the software you need to do that. But importantly, and I think this is one of the blockages at the moment, is it's a completely new type of skillset. for an owner to have. You can't just— that's why WeWork worked because they go, oh, we'll just give it to WeWork. They'll pay the rent and they'll provide the flexible space.

Yeah.

WeWork couldn't invest fast enough in all the systems it needed to efficiently pay for it. And the scale they grew kind of killed that initial culture that they had and it became taken over by sort of corporates having additional space. So it kind of, They kind of grew too quickly to sort of tweak the model, I think. The model is absolutely right, and we're seeing lots of other companies grow and fill up that void. And I think ultimately that will become a major player, but not where they're just feeding themselves. We need them to support the whole building. So the landlord needs to learn a whole range of skills around software development. There's a famous HBR article from, it's probably a decade ago now, that ranked the technology innovation and investment by industry, and property was second last out of about 21 industries, just above hunting and fishing. So it's been slow to the prop tech party.

Why is that? People just chasing yield and not wanting to—

Yeah, it's been in growing markets like the Sydney CBDs and low interest rates, it's been easy to get money. It's been high demand, limited sites, particularly in good spots in cities. So it's been, until this disruption, it's been pretty straightforward. So I think we were talking earlier that cities are constantly evolving. A lot of these, if you look at say the top end of Collins Street in Melbourne where we are now, That had a very different look and feel. It had a lot more fashion and Flinders Lane was full of fashion and other things. So cities are constantly evolving and just because you build a big office tower there doesn't mean that's not going to have to evolve too.

And what's your view on, there was this whole, was it the egg, the fried egg city? So we'll have the micro cities, so build the hubs.

Yeah, the 15-minute cities, those kind of things.

15-minute cities, is that? I mean, that was sort of a bit of a pre-COVID concept. Is that still happening or is it even more so now with—

No, I think it's still a viable concept, particularly like one of our clients had quite a big call centre type group as part of what they did and they had it in the city. Expensive people that are buying places further out, maybe the public transport infrastructure isn't great. Victoria in particular, and most of the states were investing heavily in rail to sort of address some of those things.

Yeah.

But, you know, it became apparent that you could get good employees, you could use shopping centres as an easy place to park, particularly not on weekends, and you could actually convert department stores that were pulling out into sort of office space that had team meeting rooms and whatever. So those those contact centre people could easily work from home 3 or 4 days a week. They might come in 1 day a week for a team day and you could book and use the space for that as you did it. Think of the sustainability benefits, the lifestyle benefits. It's just a really good use of the resources we already have. It's a great example of adaptive reuse.

That's good to see.

So I think these questions are, you've got to get into the detail to understand or to be able to think about what are the opportunities.

Yeah, just makes me think, you were in Japan recently, Alex. I'm not sure where you stayed hotel-wise, but there's a hotel there where you check in and you check into a modular box and it physically moves around. Have you come across like that? And is there an application for that in sort of more the corporate real estate market?

I think they're called love hotels, isn't that what they are? David, you stay there, Alex. Yes, I think this idea of the 9 to 5 is a real legacy system from the industrial age.

Yeah.

And I think the way we live and work can vary according to the lifestyles we want to have. I definitely think we're going to have more flexibility of what we do in our spare time, what we do to earn a living. I mean, it's interesting when you look at the history of, say, factories. The first factories were actually families and teams that did components. So they were very much almost like the cottage industry put under a big roof. And then that evolved into the, with Frederick Taylor and others, evolved into the modern mass production that we have and now the Japanese systems for continuous improvement.

Yeah.

I mean, so I see, This idea of 9 to 5, that hierarchical space allocation and everyone's got to be in at the same time. It's a real legacy system that we have to kind of move away from if we want to be sustainable and provide a pleasant future for our young people.

Yeah, it's a great example because I mean, we've basically left the farm where, okay, if you milk the cows or whatever your speciality is, the job's done. So it's finished and you're right, then that talent's coming into the factory and then it's 9 to 5 and it's like, oh, why don't we have this running 24 hours sort of thing? And the disconnect between outcome and space or whatever.

Absolutely. So I think it's really exciting what's happening in the city of Melbourne that leases for retail spaces and restaurants, cafes, the early morning office rush and lunch rush and then close at 3:00 PM. is now being replaced with more of an evening economy cycle. I think it's fascinating, as I say, how cities evolve. People still want to come to the city, they still want to do things with other humans, but it's just different from that legacy system of 9-to-5 office work.

Yeah. I guess that links into what we're seeing in the US with the waxing and waning of the life of the inner city and how desirable it is to live and work there. And that seems to be sort of like a 40-year cycle or something.

Yeah, or I see it actually more as something that's continuously just evolving. And it's kind of dangerous to build like a single-use tool. And I think that's where the interesting work will happen to office buildings. So I'd encourage you if your office building's still in the design phase to think about what are the other things that you would put in it other than just office space.

Yeah. And does that imply sort of interaction with public as well? Not just sort of business-to-business interaction? So then you're opening up to, I don't know, thinking about—

Well, maybe not all the public, but yeah, a bit more diversity. And I think you'll get buildings that will try and cater for different things. So the same way you have a whole spectrum of hotels and restaurant types, I think we'll see these building as an ecosystem and you'll get a really diverse mix of them depending on where they are. Like if they're in the legal precinct, they're going to have more of that flavour, or they could have a philosophical or a cultural sort of difference. They could be near universities.

Yeah.

Could be an innovation district that springs up of something that was there before. I think that's where I'd be putting my money is in things that are going to have a long future with something that's specific and is something that is a growing business opportunity.

Yeah. James, can you quickly point out a good example of an innovation hub?

Yeah, Tonsley Park is great. Despite all the doom and gloom about manufacturing, there is actually a lot of manufacturing that still goes on. It's just not the big straightforward stuff. There's a lot of different specialist manufacturing and I've got a client in Japan, little company called Mitsui, and every year they get me to organise a study tour of latest office stuff in Japan because they travelled the world and they realised that a lot of the innovation's in Australia. So they come here. I took them to Tonsley Park a year or so ago. It's the best thing they've ever seen.

Wow.

Reuse, the dynamics of it. It's just that South Australia, so no one wants to know anything about it. But I think it's interesting that South Australia now has the fastest growing economy in Australia. That didn't happen by accident. That's like 20 years of investment in what's coming next. They've got the second largest biomedical precinct in the world. The building called the SAHMRI, which is the Health and Medical Research Institute, Yeah. is a model on how you write a business case, build a building, create a culture, and attract people from around the world to go and work there. So we've got some world-class examples in Australia.

Hey everyone, thanks so much for tuning in. If you're loving this podcast, please give us a 5-star review.

You mentioned study tour there. You also mentioned Silicon Valley a little bit before, and they were probably one of the first to have the ping pong tables and even Catch that got bought out by Coles with the the slide in the office and just sort of these fun, wacky things, which was sort of pre-COVID. But is there anywhere you'd recommend? So let's say I'm a CEO or an exec that's looking at my lease is coming up, potential to do something different in that business. Is there any inspiration you'd recommend I draw, whether it's from a country or a company, or what would you sort of suggest are some good things to think about?

I can think of 3 things. First of all is just basic location and logistics. Look at where your labour force is going to be living because housing is a main issue. Potentially train is becoming a much more important network tool, a bit like London. Pretty much it's tube or British Rail and you can live further out on British Rail and they become key determinants where your labour— So I think look at look at that and where your labour pool is as a starting point for zoning in on an area.

Yep.

And that may be quite different than where some of the premium office buildings might be. Secondly, I think the leadership team, the next generation need to think carefully about what their culture is and what do they want to actually do with getting people together. and thinking of their business model around what's unique and what's gonna drive their success. And then thirdly, at this point I would start looking for those early adopter buildings that are providing a lot of shared amenity that you can pay as you go and variabilise your cost base.

Mm-hmm.

And then lastly, you'd then fill in the gaps with your own space. So that's the kind of logic framework I think I'd go through.

And is that sort of where most new builds, most, you know, large new builds are having that ground floor conference centre facilities and the office space?

You'd think so, but no.

Okay, okay.

It's a, the property industry is, I call it radically conservative to do anything it can to stay the same. Because it's fair enough. I'm making light of it, but it's serious stuff. It's your superannuation money. It's funds. It's got a huge sustainability impact. You don't want radicals doing it. You want serious long-term thinking in it. But it doesn't make it easy. Those strengths make it difficult to innovate and change.

Yeah.

So if you're that tenant looking for those buildings, you know, at this point a lot of it is not there. The choices are not there. The sophistication behind the usability model. There's a lot of, you know, some landlords are actually creating these spaces but have got no way of using them. They can't charge you for them. They don't put the right people in there to manage them so that it's a friendly experience. And yeah, there's a lot of work to be done.

Yeah, sounds it. James, it's a bit of an off-key question, but how important is the concept of feng shui when dealing with the space in Asia?

It's huge, but it's not a wacky idea. It's a very human form kind of idea. So I've done a number of projects in the region, but also here with people that have lived and worked in Hong Kong and maybe they were skeptics at first, but anyone who spent significant time in Hong Kong comes away knowing that there's, you know, some real common sense kind of aspects to it. So yeah, I, I think it actually helps enormously for just good intuitive design.

Yeah.

Things like flow of people and flow of energy and creating, you know, places that are different to go to, I think are fundamentals.

So you see that being used across spaces like Australia, for example?

100%. Yeah, I've done fit-outs here for people. I can show you where the little elephants have been put and which columns they put the gold coins in. But I mean, the encouraging thing for me is I like to design collaboratively. So rather than having a threat, I'd really look forward to working with them. And I was really pleased actually that they actually liked the— I don't like just the straight lines because there's not a lot of that in nature. So I, yeah, I was really encouraged when they actually really liked the flow of the space and how it worked and just had to minor tweak it. And also I think we're doing a hospital at the moment and Indigenous thinking about space is another area that's really interesting and really useful. where, you know, there's no straight lines in Indigenous culture. It's circles and curves. And I think that's a really interesting way of designing spaces for humans.

Yeah, definitely. Do you often look to nature in terms of your inspiration?

Yeah, I mean, biophilia is a really growing area, has been for a long time. This idea of using sort of nature in buildings, particularly when it's really carefully and thoughtfully done. We can now start to use materials like timber in buildings and put a lot more plants and improve air quality, temperatures, et cetera. So we've made huge leaps from that horrible open plan we were talking about where everything's made of bad materials and things to create really good fit-outs. So I think the fit-out industry has come a really long way in the last 20 years. I'm on a few awards, help judge things, so you get to see hundreds of different things and the quality is universally high of most spaces now.

Yeah, that's pretty good.

So I think those business leaders who are embarking on their new workspace, Plethora of talent in places like Australia to really design good space.

Yeah, reminds me of my old office in Singapore. It was just wall-to-wall sort of plants. Then I had this sort of big open sort of roof space as well and all down the side of the building. I think it was helping with airflow and temperature and everything else.

You probably don't even need to plant them in Singapore. They just grow.

Just grow.

From the minute you get off the catwalk into the taxi, you see this. Lush paradise. And the gardens there are amazing.

Yeah, they're stunning.

But you do get those completely different looking buildings. It'll go 8, 10 stories up and then have a very big outside space and then it'll have a huge cavity and then there's more volume. Is that a restriction thing that's done that design or are you across those buildings?

Yeah, so a lot of climates, You can be in Brisbane, a lot of Sydney workspaces, we can work a lot more outdoors or in semi kind of conditioned space.

Yeah.

Bit more difficult in Melbourne 'cause we've got colder winters and winds and things. But yeah, there's, I mean, the way I look at it, this sort of Mies van der Rohe type model of an office building is pretty much a '30s idea and it was all about status, modularity, everything. I mean, it's beautiful, but it was only for a period in time. So the more we can evolve that concept and develop, you know, a new type of form, I think that's really exciting.

Yeah.

But it needs the businesses to think about it carefully and come to the designers with a really good brief. You know, don't expect the designer to just randomly get your culture right. Like they'll design what they think or what they want to do. But you know, and that's my kind of work as a consultant is to help the client think about the business value and the cultural value of what they're creating so that you can brief the designer or choose the buildings in a better way.

So when they're thinking, are they thinking about how they would like to work or what they're like, What do they need to sort of communicate to you to then come up with, you know, there's so many selections of finishes and lines or curves and all these options, but what's the ideal intel that you'd need to then be able to really create a design that sounds like custom and bespoke for that individual?

You can do it, you know, reasonably mathematically of understanding how you want to get your people together, the rhythm of business, the cycle of things. Creativity, how do you encourage creative thinking, design thinking, no matter what the discipline? I mean, I've done a lot of work over the years with many of the banks and investment banks and that whole idea of why should it be dull and grey and let's look at other industries like advertising and others where they stimulate creative thinking and create bump and now nudge.

Yeah.

That we can actually help speed up processes and either better ideas, better implementation, speedier implementation, or fail quickly, but actually get things to market quicker and grab market share. So these are— I see it as a serious business tool, not a bolt-on. It's not a flower in the lapel. It's the whole suit and it's a business tool and it's hugely important, I think, to attracting and keeping people to really physically show that you're serious about what you're doing. I'm sure you've seen it in your careers when you see organisations that say one thing and when you meet them and look at their culture, it's completely the opposite.

Totally.

I think the next generation's pretty switched on about that. I'm not prepared to sit there for years.

And James, for my benefit, how do you encourage innovation with space? What are the main traits?

So, I mean, if you look at the creative process, there's a lot of time that's like the incubation, the chance encounters. So I'm actually a— we've mentioned Japan a bit. There's this thing called the Seki model of knowledge creation and management. And a lot of the office buildings I've done, and, you know, I've done buildings, you know, up to 100,000 square meters, are based on this SECI model of socialization, externalization, combination, and then implementation of ideas. So I don't think this is an accident. I think, you know, when you study the theory of creativity and thinking, it becomes reasonably straightforward how you move through that innovation cycle. And, um, you know, really, we were talking about it before, um, of young people learning by osmosis and those sort of things. Um, there's 2 types of knowledge. I'm sure everyone knows this— the explicit and the tacit. Um, the explicit you can write down, the tacit you can't. And we are wired for tacit. Like, I'm, I'm doing a hospital, you know, the most important thing I think in terms of their workplace is to come back to a space and be able to share your tacit knowledge. You know, it literally could be life or death or, you know, a crossing over of information. Tacit?

What is tacit?

So it's stuff you can't write down, basically. So it's what we're doing right now with our visual cues, right? And it's that learning by osmosis and all of these things that how we learn from babies onwards of how we share information. You combine that with the creative process of Creating that socialization where you have— that's what's great about cities and buildings, all those chance encounters of different people. It's what we're doing at universities at the moment to take the traditional schools and mash them together to create clusters of different fields. And I think that whole breaking down of silos of knowledge—

Yeah.

Is where we're going to be for the next 50, 100 years.

Absolutely. Yeah, it seems to be where a lot of the innovation comes, the joining of 2 different spheres and that communication suddenly sparks the next idea. No, I think that urban planning angle is, and obviously the legislation that goes along with that, as I say, it's got to be very well thought out.

Yeah, I'm really interested in what happens within the space, whereas others are more interested in the external logistics and look and feel. But yeah, I have this view that the purpose of it is pretty important.

So James, just wanted to check in. We're about to move into sort of more short-form Q&A, but we're talking about Citroëns and Michelin stars and all sorts of things before the podcast. But did you actually, I know we've sort of ran the questions down a few different rabbit warrens, but was there something that you came here today and you thought, I hope they ask me about that because I could answer that? Maybe we'll give you the chance. to throw your answer to your own question in here?

That's too hard.

Then it'd just be Q&A. You can take Q&A yourself. If not, Alex has got about 20 in the chamber to fire at you.

Yeah, we'll fire away. Probably that bit about how cities are evolving. That's what I was hoping we'd get to because too often it's a broad generalisation and a limited sort of view. You know, I think, you know, when you study the way cities like New York have evolved over the last 150 years, you realize it's a constant thing. It's not just a— it's not a steady state. You know, we walk into Collins Street and think it's always been like that. It hasn't. It's evolved a lot. You know, a lot of those big towers came along, you know, as early as the late '80s, early '90s. They're pretty recent type of things.

Yeah. Funny enough, that takes me back to one of my favorite courses at university, it was the historical geographies of London.

Precisely. And London's a great example. Like, it started off as a swamp.

Yes.

Like, you either had 2 ideas of a city. It was on the top of the hill or it was in a swamp 'cause you could defend it. And both London and Paris were swamps.

Yeah.

And then you built, you know, it's a bit like the Monty Python where the first castle sinks, then you build another one and then, you know, got a wall around it. But yeah, and the, the Industrial Revolution, which took off because of a whole range of different reasons, proximity to the right materials and all that. And yeah, the way it changed the structure of the city with the train infrastructure, the telephone.

Absolutely. Yeah, the technology. And obviously what galvanized the change in the first place was normally public outcry for something that had happened, the big stink or whatever it might have been.

Yeah. One of my favorite books is a book called Pandemonium written by an academic in the 1920s. And it's clippings of newspaper articles at the time of significant events. And the first running of a train, which actually killed a politician. And to actually read about the uproar of the time and the reluctance to embrace this new technology. I think there's a propensity of humans to, not fully understand the potential, good and bad, of what's possible. We can see it with our embracing of technology maybe too early in some areas.

Definitely.

Because they had those speed restrictions on all trains in Europe because they thought that we'd explode, our bodies would explode if you went over that speed.

And the first cars, you had to wave a red flag or walk with a red flag before them.

That's right. Get the horses out of the way. That's right.

Yeah, can you imagine, like, can you imagine the smell of a city like New York in 1905 before the car? I mean, it must have been pretty grueling.

Well, then even when the car came in, I imagine they weren't so, I mean, you know.

Yeah, they're a bit smelly and steamy and dangerous.

Well, now with electric cars, they'd probably say the same thing in 10, 15 years. Can you imagine having all these fuel cars being stuck in traffic? Assuming that ends up being widely adopted.

But just everything else, the lack of a standardized garbage collection or working sewer system and everything else.

It's been amazing the last few hundred years. I think also something that's not on this topic, but probably I think it might be interesting for you to explore is around the logistics industry and the whole last mile of delivery. We all use online shopping to an enormous degree and the way we we move all those goods around cities, I think it's gonna be a massive change. I was at the Tokyo Motor Show a couple of years ago and there was hardly any new motor vehicles. It was all, you know, even suitcase-sized autonomous vehicles that would whip around apartment buildings dropping off. That's gonna be really, really interesting.

Yeah, that's fascinating, isn't it?

It is, it is.

Well, one of our members is sort of in the last mile delivery space.

Yeah, well, yeah, I'm interested in that. I don't know if anyone else is.

Yeah, Joe, who we had on the podcast. Joe Shofra, shout out.

Yeah.

And it was fascinating talking about where they see the future going and obviously testing delivery men with sort of big autonomous suits and everything else like that, or mechanized suits rather. Obviously that's a little bit more clunky, but yeah, then the whole drone delivery aspect and how they're sort of creating revenue through advertising for the company they're delivering for, ads and the AI that they're using to catch eye movement and stuff.

Yeah, and all the sustain— it's about 10 to 15% of the economy, so it's a massive part of how everything works. But I think also in some of the things I was saying about the property industry and technology, a lot of organizations are in the business of providing systems for buildings and people have tried to create a bit like the Microsoft world where it's a closed system and they can control it. But the next generation is going to be middleware that will be able to get basically just bits of data to talk to other bits of data for that moment you need to make the transaction.

Yeah.

And I think that's a really growing, interesting area. Where you can white label it so that you can brand the, the output to be an ecosystem. Like, we're working on a, a health innovation building which is between a university and a hospital, and there'll be a lot of research going on there. And some of it will be, you know, funded, some of them, some of it will be supported. You know, the only way to really run that is through really good software interfaces that enable you to book space, measure in real time the use of space, alert you if events are going on.

Yeah.

So that whole middleware then branded and this idea of what's called physical rights management, which is to instead of that 10-year lease, and London used to have 25-year leases until reasonably recently, now to actually hour by hour choose who's allowed, could be a community group after hours, for example. You'll give them the physical rights with the security access and everything and the ability to choose the technology and the food or whatever they want for those meetings.

Yeah.

So I think that's a real growing area of interest to, and you can see how that would work. It's already happening in retail where it'll, with all the Beacon technology, it's been around for a decade now. It'll nudge you when you bought a pair of these jeans, the shirt's now half price or whatever, all of that. With knowledge and business, I think that's going to be really exciting if people opt in and the data's secure.

Yeah, exactly.

All right, Alex, let's get into some shorter form.

I can do that. So, James, questions with these, you know, please expand on your answer. It'd be interesting to know why you chose your— the answer you've selected. Can you think of any book that's had a big impact on your life, or one that you'd like to recommend? You referenced a number of articles.

I can tell you one not to read, which was On the Road by Jack Kerouac. When you're starting out at work for the first time because it just makes you want to quit and go and do something different with your life. That messed me up for a couple of months. That's not the answer you want.

No.

I've— that Pandemonium book I mentioned was very influential. I think a lot more, more in my lifetime anyway, more articles. I've got a I mean, there's all the classic books on business and I think just be a sort of magpie and read everything you can. I mean, I think things, yeah, it's very basic, but things like the, you know, how to use time efficiently and—

Yeah.

You know, don't sweat the small stuff and those things. I think they're 101s for anyone starting out. There's one I used, I helped set up a master's course at Melbourne Uni in the architecture school school and it was on the future office and things like that. And I had to pull together a reading list.

Yeah.

One of the books I put on there, which my wife actually read on a holiday, was Dale Carnegie, How to Win Friends and Influence People.

Yeah.

And she said, I'm reading— what are you reading? And I said, that's like ancient. That's rubbish, isn't it? She said, no, no, it's really good. So I finished my books and read it. It was fantastic. It was really good. So I put it, you know, I'm trying to get architects to think a bit more like business people because that's the clients and that's what we're trying to do.

Is that where they talk about smiling?

Yeah, and remembering people's names and the basics of, it's all the basics of, you know, getting on with people in your life and work. And I remember anyway putting it on the reading list and the professor told me to take it off because it was rubbish, but I insisted. But then I was, um, I did a lot of work with— I still do— with lawyers and professional service firms. And there was this Harvard expert called David Meister, and he was like the professional services firm consultant, and they all used him. They used to fly him out to Australia. And I remember going to one of his talks, and he stood up and said, you only need one book in management consulting, and that's How to Win Friends and Influence People. So I felt vindicated a bit.

Awesome. Thanks, James.

But I think a lot of the knowledge is now so spread out that I think scour the HBRs and all of that is a basic thing.

Sorry, scale, you said?

Just scour. Sorry.

Sorry. Yeah.

And I think at the moment, my favorite is the Spatial Web book. I think that's really— it's got the most— the first chapter is the most succinct understanding of what's gone on in the last 30 years of technology that I've read.

Oh, great. Thank you.

I should get a cut if I'm promoting this.

We'll put them on the show notes.

Affiliate link from Amazon or Booktopia.

Thanks. Related to that, do you have a favorite quote?

I've got a few. I actually collect a bunch of them on my phone. One of them would be a firm grasp of the obvious. We can overcomplicate things. I'm lucky in my work, I get to meet all sorts of business leaders across all sectors. I've met a lot of the people you've read about in the CEOs and things over the last 20 years. And that's what they have. They have a really firm grasp of the straightforward and obvious. And I think you build on that rather than creating complexity.

Do you have a passion that we might not know about you? or a new interest that you discovered?

Despite embracing the digital age in work, I quite like collecting books. So I've actually got a motoring book collection that I'm continuously scouring auctions for. And that's what I'm— yeah, that's—

Are these sort of owner's manuals or are they—

A few of those, but no, it's just all sorts. There are beautiful books written on— for one reason or another, I think I just I was born that way. I like automotive design.

Yeah.

And as Ralph Lauren said, like, why buy art when you can buy some art that moves? And he has an amazing collection of automobiles, probably the best in the world. But, you know, there are amazing books that, you know, are written and produced.

And I like the whole, you know, I'm into the design of the books and the cars and, well, Sort of weirdly linked to that, um, the other day we were looking for a sort of a motoring atlas of France, thinking of going on holiday there, and, uh, online shopping for one. I hadn't realized they're collector's pieces. So, you know, the ones from 1990, 2000s are thousands of dollars. Yeah, right. A little for a motoring atlas. Couldn't believe it.

Yeah. Do they still make atlases?

Yeah, the Michelin Guides.

Yeah, no, exactly. We were talking about that earlier. They— yeah, and the, the purpose of them was to try and— when the The automobile first came around was to get people to start driving to the countryside and explore things. Yeah.

The whole restaurant rating sort of moved on the back of that, didn't it? That's excellent. Thanks, James. James, if you were to give your younger self some advice, what would it be?

I wouldn't sort of change too much. I think I was really lucky. I actually had a cafe at university and I was interested in, you know, certainly gave me a good sort of understanding of costs and running a business and things, which was very useful. But I was lucky that I fell into a field that was endlessly interesting. And I guess that's what I would, you know, tell myself is don't just have a linear career where you, you're kind of confined in something that's maybe not that evolving to get some, yeah. What I do is, you know, it's space, it's design, it's humans, it's management culture and theory, technology, you know, cities. It's endlessly fascinating. So that's what I would say to find areas that are quite open-ended and become a specialist in some of it so that you can—

Yeah, that's good. Thanks. And if you're thinking about your legacy, what would you like that to be?

Well, the good thing about being a designer type is you actually get to build stuff. So it was a— it was an interesting— I was waiting in line for a— at the local primary school, we're in an election, and someone had just joined this organisation where I'd just done their building and they were just talking about their experience of coming to this building and how, you know, it was quite a radical space, very different than any other building in the city. And they were talking about how they loved it. And I thought that was— I've always thought that, you know, there's a big responsibility in doing this. People are going to spend a lot of time in these buildings and countless hours of human endeavour. to make it as good a human space as possible is kind of a big responsibility. Same with the hospital that I'm working on. I kind of wish I'd got into health quicker because the workplace is really outdated, not very good. There's no daylight and all of that. And yet these are some of the most valuable people we have in society. So—

Definitely.

Yeah, I think that's what, you know, us designers are, are sort of tasked with is to doing our best to create a good human environment.

Yeah.

For, you know, many, many generations to come because these buildings should last a long time.

Yeah, makes sense.

Hopefully if your legacy's intact, they'll still be there for a long time and the design will—

No, I think, what is it?

Good.

We plan and God laughs, you know, who knows?

All right, now I've got some rapid fire. Do you want me to do my timer?

If you have a minute.

I thought they were the rapid fire.

No, no.

They were harder than the other questions.

No, it's pretty relaxed Q&A. I think Alex went easy on you. All right.

James, these are just the first thing that comes to mind, either or questions. Are we ready, Dave?

I've wrote some with my handwriting, so just like Alex.

I'll try and decipher those. Okay, I'll start with those. All right, here we go. Corner office or hot desk?

Neither. Can you say that? Sure.

North-facing or west-facing?

Depends on the day.

Office plants, real or fake?

Real.

CBD or metro?

CBD.

Lease or buy?

Neither. Use as you go.

Fashion or form?

Form.

9 to 5 or flexi hours?

Flex.

Private or communal?

Communal.

Cash or loan?

Cash.

3-year or 7-year term?

3.

Public speaking or written communication?

Both.

Organic growth or strategic partnerships?

They should be the same thing, I think. Yes.

Long-term planning or agile adaption?

Yes, both.

In-house development or outsourcing?

In-house, I think.

Data-driven decisions or intuition-led choices?

Yeah, get, get an expert in both and put them together.

That's a minute. I actually let it go an extra 15.

I think I only got 1 out of 10, didn't I?

I think it's interesting because you kind of, a lot of them you were like, neither, neither, neither. And I think true to design, there's obviously so many choices and options and different ranges even within down to the micro decisions. I mean, it must be like you mentioned finding a career that you love. I mean, you couldn't think about how many decisions go into a design. Starting with, well, as you were saying, those 3 things start with location and moving from there to creating a great space and experience. So I found that interesting the way you were answering that.

Yeah, it is hard because each word you're thinking of all the theory and whatever behind each one and neither of them by themselves actually work terribly well.

Yeah.

But that's why you did 'em.

Exactly. Thank you, James.

Yeah, thank you, thank you, James. Thank you for your time today. Thanks for your energy. And we didn't quite get to talking about the Citroën, but we can continue that conversation. And yeah, looking forward to walking through one of your buildings soon. And for the, for the listeners out there, if you do walk through a great space, the designer may be in the foyer, so maybe tell someone and they'll overhear it.

And that would be interesting, put some 3-dimensionality to it.

Yes, absolutely.

Yeah, great.

Thanks, James. It's a pleasure.

Cheers.

Hey, this is Alex. If you enjoyed the content so far and you want us to do more, if you want to hear more, click the subscribe button. It allows us to bring on more guests in the future.

Thanks.