Balancing Legacy with Flexibility – with Vivienne Grafton of the Bank of England

Welcome to the Purpose of Place podcast. I'm Despina Katsakakis, your host, and I'm delighted to have with me today one of the most visionary people in the world of commercial real estate, Vivian Grafton, who has a wealth of experience of transforming many of the banking giants, hsbc, Barclays, and now leading operations of real estate location sustainability for the bank of England, one of the oldest central banks in the world. Vivian, welcome to the podcast. Thank you, Despina. It's great to be here. So the bank of England is such an iconic location for London. It is a place that all tourists want to come and see. It's a very symbolic place for the city, but it's also a workplace. And I think it'd be really interesting for our listeners to hear how you see reconciling all of those different identities that the building has. Well, Despino, I think one of the things that really attracted me to joining the bank, right, having worked, as you say, with the HSBCs and the Barclays in the financial services private sector, was what did it feel like to operate on the real estate side in the public sector? And the bank seemed the perfect place. Right? I mean, as you say, it's a 300-year-old institution. The building itself is. It is truly amazing. I mean, the first moment I walked through the doors, I was really sort of just taken aback at the sheer beauty of the space. Now, some of that is covered up, as you might imagine, with the onset of raised access floors and suspended ceilings and the modern workplace. But one of the reasons I wanted to join was could I drive the same sort of appetite for change in that 300-year-old institution as perhaps I've been able to do a little with the Barclays and HSBCs. Now, public sector, much different in terms of the spend profile. It's all about value for money. And while it's an amazing building, it does have a challenge around obsolescence. Grade one listed. You know, how do you bring that to a point where it's really responding from an adaptability and flexibility of a space? How do you make it more porous given the security environment that we sit within? And how do you really create something that really further supports the culture that the bank has? I mean, we have stability, as you say, we have this sense of importance around what we deliver for the country. You know, that stability point and how we drive the economy going forward, I think is super important. And that sort of legacy pervades the space. How do you bring that forward and make it in touch with the changing world, which is one of the mission statements of the bank, human and humble, and create something that's a truly inspiring workplace for colleagues and indie businesses. To the Bank. It's very interesting because you talk about resilience. Right. And the bank, of course, the building and the bank of England, both the institution and the building have been resilient for hundreds of years. Yes. And in essence, you're sort of looking at how you maintain that resilience and move it forward for the next generation of workforce and work processes that will be taking place. Absolutely. And how do you also honor the amazing legacy that, you know, when Sir John Soames put that building together, as it were, how do you bring that to life? I mean, it is a very important building. I mean, it's part of the critical national infrastructure. And, you know, I'm sure I'm not giving any secrets away here, but, you know, it's very important from a gold storage perspective. Right. And there's a lot in that building. So enabling colleagues within that infrastructure, whether it's through, you know, bringing together the technology, the people and the real estate element, to bring that alive and to create something that has a really compelling proposition for employees. I think it's a thing that's really excited me on joining. So, Vivian, of course, the role and purpose of the office has been changing dramatically the last few years. How have you seen that transformation affect the ways of working and the relationship between the workforce and the building in the bank of England? I mean, clearly I haven't been with the bank very long, but, you know, Covid obviously changed things dramatically, as we know. And I think what it really did was move us forward in terms of ways of working. Probably. I don't know, I talk about in terms of maybe we leapfrogged five years. We'd been talking about flexibility, agility and choice for many years, but it was proving very difficult to do in some of the corporate environment. I think for the bank, we are still in a position of sort of rows of desks. We have a lot of highly skilled individuals within the bank who like quiet working. And one of the challenges, I think, is to sort of talk about how do you get people back into the office now, given a lot of it is individual work, because people can obviously raise the point of view that actually I can do that at home. But as we know, the purpose of the office really is that collaboration. It's that sparking of ideas. And it's important in terms of driving a sense of community and culture. And for Me, that's the main thing. Right. The building is a real representation of the bank's culture. I think the challenge for me in the new role is how do I really bring that to life and how do we enhance that? Because even if we think about potentially refurbishing spaces, I think we know that great design, fantastic. But now it's about the experience that sits over that, that holistic proposition that you need to be able to provide for colleague that provides that compelling reason to come back in and reaffirms the need and the purpose for the physical office. So using the design, but also layering the curation of the inactivation of the space, it's a real driver for. Yeah. And I think that really helps as well as an employer, try to differentiate your value proposition from others. And for me, it's very important that that feels special when you working for an organization such as the bank of England, that we really are taking care of colleagues. Right. Whether it's wellbeing, whether it's the connectivity that we give them. You know, everybody talks about frictionless and seamless environments. Now, we do have some way to go in terms of how we're doing that within the bank, but certainly from my time at other organizations, the viewers, you should have everything on the handheld. You know, whether or not it's booking the desk, whether it's sorting the technology for the day in terms of AV equipment or whatever it may be, whether it's connecting to colleagues who might be in the office and you haven't seen for a while and you want to get together with whether indeed it's actually speaking to your personal trainer in the gym and connecting that to the chef in, you know, in the restaurant facility to talk about what you should be eating that day. I mean, that was always an aspiration that we had. Could you really make it a personalized experience? Long way to go with the bank. But for me, this is what's going to make that sense of place making come alive. And I think it's very, very important for the bank. That frictionless experience really brings together that sense that the workplace is anywhere you are and is supporting you anywhere you want to work. And the building becomes that catalyst for bringing people together, that real destination. And of course, you have a dest building by default because of its great design and symbolism. So almost building up that aspect of event and experience becomes even more important. But at the same time, the building facilitates you in doing it. Yeah. And look, I think in the past we've talked about the physical office We've talked about home as an office extension and we've talked about a third space and how that ecosystem comes together to create a really sort of live embodiment of how you get work done. And I suppose that's the secret going forward. How do you really start to understand where work gets done within these buildings and how you can enable people to be more productive when they're on site? Now, one of the things that sits under your remit at the bank is sustainability. And of course, sustainability is a critical priority for many of our clients. How do you approach this, particularly, particularly in such a complicated building as the bank of England? Well, I mean, we have a location strategy that we're developing at the moment. So one of the opportunities that we have to bring our strategy to life is in our search for a site in Leeds. So we've already got temporary space which we've extended, but we, you know, we are looking at a future home for the bank in Leeds and that gives us an opportunity to really try and ensure that the choices that we make are sustainable for the future. A little more difficult within the main building, given it's a grade one listed, as I said, beautiful space. But, you know, how we can transform that from a sustainability point of view for us is somewhat work in progress. You know, thinking about neurodiversity, for example, and how we want to line up to that. You look at some of the accessibility challenges we have within the building with these amazing bronze doors, but take two, you know, two guys to open them. Right. So how we make it fit for purpose for disability and other challenges is really difficult. Right. On the sustainability side, we're really working hard with our consultants at the moment as what can we do, you know, single glazed building, for example. We have a huge amount of on site generation and storage of diesel and all of these other things. So do we have the answers at the moment? No, but it's absolutely something that we are passionate about, driving forward and making sure that we hit our strategy and our targets for 2050. And it's an interesting challenge that I think many people look to you and how you're going to do it, because reimagining existing buildings and listed buildings is a tremendous opportunity for us to meet the sustainability targets that cities and organizations have in place. But Leeds is very interesting. You mentioned Leeds, and of course we're seeing a lot of our clients tap into second tier cities around the UK and in other countries to be able to access talent. And it makes me think of a project that has a Lot of history with your involvement in it. I was very, very excited in the year when I was president of the BCO 2023 to see Berkeley's Glasgow campus win the best of the best workplace in the uk. And I know your vision was very instrumental in the whole opportunity of using Glasgow to create this incredibly impactful regeneration project. Tell us a bit more about how that vision came about. Well, I think as part of the location strategy, obviously, we were looking for a spine, if you like, within the uk. We were also looking out in the US and in India at the time. Very much a view of could we consolidate some of our larger sites so that we had critical mass really to enable career development and succession and to allow the bank to really co locate key functions for efficiency. The bank had had a hub in Glasgow for some time and were really, I think, very positively disposed to the talent that they could access then. So it was all about talent. We wanted to build campuses of scale and ideally we wanted something that, you know, maybe I've used the word before, but porous is a site, right, that allowed a different look and feel to be brought to life within the office. And looking around Glasgow city centre, as we did for some, you know, some weeks, it was clear that the sites were all quite tight, right, and there were a couple of options, but there was an opportunity to go the other side of the Clyde, which was not part of the cbd, and really take a brownfield site and regenerate it. And that was a really powerful imaging. You know, we talk about sustainability, but that ability to regenerate an area that had, you know, it was derelict and I forget how many years it had been derelict for. There was a couple of historic buildings on there, but could we piece it together with one of the developers and then create something building out the ground, a campus that gave us quite a lot of flexibility, but really talked to the public realm and allowed us to sort of really invest in the community, because that was one of the most important pieces. How did you integrate with such a large site into the local community? And we worked very closely with Scottish enterprises and the local council to see how we could create something that did have a real excitement around the public realm, how that came in and how we could bring to life a workplace that was really embracing all of the community elements. So, you know, thinking about architects, we had fabulous signature architects, which were Gensler at the time, but we wanted to also lock into local talent. So we used a series of local architects as well to bring different areas to life and Then from there, we started to think about, what are the amenities? What's the experience we want to create? Wellness was very, very key and we were locking into local artisans and suppliers to sort of say, look, I mean, there's a very old bike shop in Glasgow. And we had a chat to them, saying, look, why don't you come and do an outpost actually in the building? And we had something called the street. I mean, that's a bit of an old phrase, I know, but we wanted to populate that street with local businesses and amenities, and I think that really enabled us to connect with community. We'd had the opportunity to go over to San Francisco and I was really taken with a coffee shop we went to, where there was a bakery and a pottery and all of these things as a patchwork of the local talent that was bringing the workplace to life almost. And so we actually found a group of refugee women who didn't speak very good English, but were fantastic bakers, and they came and ran the bakery and all of these things together, I think, allowed us to create something that wasn't just about a fantastic interior, because it was an amazing interior, you know, and each building talked about either the local landscape or the local industry. Well, there's a lot about making, all about makers and. Absolutely. And what I find fascinating about that project, and I think it's fair to say that the judges unanimously were absolutely inspired by the project, is that it actually taps into so many of the things that post pandemic we see as being critical to create an environment that will be enticing enough to have people come to the office and inspiring enough to keep them coming back. And, of course, you created that in Glasgow. You engaged the community, you deliver the ESG targets, you tapped into the talent and. But it has that sense of humanity. Yes. So that whole piece about needing to come to the office to be with people and to feel connected to the place, which we've now seen, is of course, an underlying driver of what makes offices successful. Yeah. I mean, for us, it was about placemaking, there's no doubt about it, how we interacted with the public realm, bringing some of the historic buildings back to life, using some of the spaces for our startups and our fintech hubs, bringing the life into the space was really important. And I think that's been part of the reason it's been so successful. Yeah. So placemaking at the City of London scale, you're right in the middle of the city, at the heart of the city. And you mentioned Porus, which is a very important word. That idea of porosity, permeability in buildings is something that we've seen very, very powerfully come through. You talked about the technology being frictionless and the technology being able to connect you with your experience throughout the day. And yet at the same time, we're not really leveraging the ability we have to use technologies like that to measure employee experience and to iterate those experiences. Do you see that as an opportunity for real estate? Absolutely. All right. And I think, I mean, there's been a huge amount of development in smart building technology, et cetera, but I think I come back to the importance for me of experience. It is, you know, I suppose, a huge leap forward that you can be so flexible and adaptive to what's going on within buildings through the use of technology connected to your base infrastructure. So, you know, I would love to be in a position in the bank. We're not there, but you know, where maybe you have a major town hall that goes on within a building and you know, as people exit, you know, this lifts would come to the floor that they're exiting. Right. And you would have that ability to be more predictive as what's needed. But for me, I think the holy grail is more around the experience and this moment to moment understanding of, you know, I need to do some work in a quiet way or I want to connect with my colleague who I haven't seen for however long. How does the technology sort of allow you to move and operate within the thing? And candidly, how does it allow you to be more productive? Yeah. And everybody talks about the holy grail being productivity. Trying to understand what data you need to collect to enable that, I think is something that real estate colleagues all need to focus on. That's a really interesting point because in many ways we're seeing a real shift of corporate real estate. Working more closely with the chro, with the coo, with the cfo, to bring more complex business cases together to measure the return on investment of what you do in property. What are your thoughts on that, do you think? Do you see that as an important departure for our industry? Yes, I mean, I think return on investment, you see so many business cases equally that come forward and there's no tracking as to whether the benefits are actually realized. I mean, that's one comment I would make. I mean, the bank's interesting because it's almost a return on purpose. I mean, it clearly really is, you know, interested on return on investment. But the purpose is so overarching. It's quite an interesting approach that they have. But yes, I think all of the different elements of data collection need to come together. I mean, AI is transforming the whole thing and it's going to be so powerful. I think as we move forward. How should CEOs work with corporate real estate differently to enable place to make a profit business outcome? Well, from my perspective, I think I see too many real estate teams still in the order taking arena. Right. Rather than moving towards that strategic partnering that we talk a lot about, we've still got a lot of work to do within the bank to achieve that, but I think it's using those relationships to really land the message of how important real estate is ineffectively bringing to life the culture and the transformational change that CEOs want to achieve. And I think sometimes that is missing. And I think real estate needs to work harder and showing the value that they bring to enhancing and engaging with colleagues. That value proposition is super important. It's a fantastically important point and it's something you and I have talked about for many years, about how physical place embodies culture and genders, behaviors, and very few organizations actively manage that relationship. But I agree with you, that is a tremendous opportunity, particularly in today's world of, you know, the place needing to stand up and really make an impact. And it has to come from the top. Yes, right. In many ways. So having that ability to influence and make sure that consistency of message and that passion comes out around what can be achieved and what the purpose of the real estate is in this very quickly moving world, I think is important. So if you overlay the technology discussion we just had with that, you begin to then look at the opportunity to use design in place to drive and embody culture and at the same time track in real time the impact that it's having on people being able to do their best work and have the best experience at work. What are you doing in your journey with the bank? To look at different metrics to create different experiences moving forward. So what we're trying to do is to adapt activity to space. Right. What we want to be able to track is people's emotional connection to the space and that get under the skin of the sentiment and that personal connection that people have to space. And candidly, from my perspective, we're just getting started. That was really fascinating, Vivian. And given your extensive experience in this industry, what would be some closing thoughts for corporate real estate executives that things they can do to make an impact? I think the first thing I'd say is build the excitement around the power of real estate with your executive teams and really work on what is the value add. Right. The old metrics don't really capture colleague sentiment and emotion. And I think definitely there is a real need to sort of build a set of metrics that tries to encompass that and capture that, because that is so powerful the business. But at the same time, you have to deliver to the business's objectives. And sometimes real estate functions, I think, can get a little disconnected from the business. You know, I reiterate, from order taker to strategic business partner, we're talking about running real estate as a business. I mean, most of us have a P and L and we should be held accountable for that. To be able to do that, we need to be really connected with the business and delivering what it is they need to be successful. And I think sometimes we do get disconnected. We think we know what we're doing from a real estate perspective, but potentially it's not what the business needs. So driving that connectivity with the business, I think is really important. Driving the connectivity with people, with technology, creating that sort of holistic response to the customer internally, I think for me is what will enable corporate real estate teams to be successful in the future. So much more complex and integrated role and skill sets required to deliver that and more leadership needed. You know, you see many people focused less on the SME knowledge now and more on the leadership qualities that sit within those teams. For me, it's a blend of the two, and I think it's very important to make sure you have the right balance. It's a real moment of renaissance in the real estate industry. Well, how wonderful to discuss this with you. Thank you so much for joining us, Vivian. Thank you, Despina.